Despite a grilling hearing before the US Senate Banking Committee, US Federal Reserve Vice Chair Janet Yellen never faltered from her stance about her employer's economic policies.
On Thursday, Yellen and members of the US Senate special group were in a two-hour confirmation meeting regarding her nomination for to replace outgoing Fed chairman Ben Bernanke.
Although the members of the senate called out her dovish, or gentle reputation, Yellen was resilient, promising to stand by her employer's economic policies and was prepared to stand by the Fed's efforts to reduce interest rates. Yellen also assured that any risks that would harm the US economy in relation to the implementation of such policies will surpass the risk of not doing anything about the US' weak economy, which is still very weak.
"I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy," Yellen said.
Yellen's loyalty was admired by Democrats and especially the Republicans, who earlier were outright critics about the Fed's economic policies.
Centrist Democrat Sen. Joe Machin from West Virginia said to Yellen, "We have the utmost respect for you."
A committee aide told Associated Press that Banking Chairman Tim Johnson, D-S.D., is planning a vote immediately, and might happen next week.
The Fed's hotly debated policies included an USD85 billion monthly bond-buying program and the retaining of its key short-term rate close to zero. The asset-buying program, the Fed said earlier, intended to reduce the long-term interest rates, thereby promoting faster growth of the economy. The Fed would be maintaining its short-term rate until unemployment will fall to 6.5%.
Yellen didn't bite the Republicans pressure tactics, which involved highlighting the dangerous risks of swelling the Fed's already massive balance sheet to USD3.8 trillion.
Yellen addressed skeptical members of the Senate and said, "The committee is looking for ... signs of growth that are strong enough to promote continued progress" in the labor market. She said "there is no set time that we will decide to reduce the pace of our purchases." She also insisted that the Fed would like to see stronger economic data before scaling down its asset purchases.
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