Yellen Says Economy Is Robust, but Adds That Fed Will Stay Flexible
Representative Jeb Hensarling, the Texas Republican who heads the committee, gave Ms. Yellen an unusually warm reception for the opposite reason, applauding the Fed for moving ahead with rate increases
and describing the Fed’s plans to start reducing bond holdings later this year as “more good news.”
These biannual hearings can be combative, but steady economic growth
and the Fed’s commitment to a retreat from its stimulus campaign have drained some of the tension from recent sessions.
Ms. Yellen, in her opening remarks on Wednesday, said growth had picked up after
a slow start to the year on stronger consumer spending and business investment.
Ms. Yellen said the Fed was keeping a close eye on the latest inflation data,
but she reiterated the Fed’s position that it expected prices to start rising more quickly.
Asked whether her appearance before the House committee on Wednesday might be her last, Ms. Yellen responded, “It may well be.”
The hearing also gave members of both parties a chance to talk about Mr. Trump.
Average hourly compensation including benefits rose 2.25 percent during the 12 months ending in March,
the Fed said in a biannual policy report to Congress that coincided with Ms. Yellen’s testimony.
“We’re watching this very closely and stand ready to adjust our policy if it appears the inflation undershoot will be persistent.”
Ms. Yellen’s testimony before the House Financial Services Committee lifted stock prices and lowered bond yields on Wednesday.