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Fed Chair Yellen Remarks Show Confidence in Slow, Steady Growth

Released: 20-Mar-2014 12:00 PM EDT
Source Newsroom: Cornell University
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Andrew Karolyi, an expert on global business, international finance and a professor of Finance and Global Business at Cornell University’s Samuel Curtis Johnson Graduate School of Management, says Janet Yellin’s remarks to the Federal Open Market Committee show confidence during a time of slow economic expansion.

The Federal Open Market Committee is the monetary policymaking body of the Federal Reserve. It includes 12 members, seven of whom are members of the Board of Governors and five are Reserve Bank presidents.

Karolyi says:

“Janet Yellen’s first news conference as Federal Reserve Chair did not disappoint. She clearly indicated a continuation of the steady taper program and of the use of forward guidance as a key policy tool, to which we have all become accustomed under her predecessor.

“We should take this as a signal about the Federal Open Market Committee’s confidence in the slow, but steady U.S. economic expansion and should not be surprised to see continued upward pressure on consumer and mortgage interest rates, a tamping down of somewhat frothy equity market valuations, and the further strengthening of the U.S. dollar relative to other major currencies.

“And we should just as readily expect more push back from central bank officials in some developed but many emerging markets about the on-going dislocation caused by spillovers from U.S. monetary policy actions.”

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