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Janet Yellen Testifies Before House Banking Committee, DOW Hits Record High

The economy is robust and in good shape, according to Janet Yellen, current Federal Reserve chair.

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By Roman King | USA

Janet Yellen, the current Chairwoman of the Federal Reserve, testified before the House of Representatives on the current state of the United States economy, and the message she delivered was upbeat.

According to Yellen, the strength of job growth has “been increasing”, and that the Federal Reserve is still on course to cut down its bond holdings this upcoming fall. However, she noted that the Fed is still wary of the recent reduction in inflation, stating that while general prices are expected to rise, persistent weakness could force interest rates to rise slower than expected.

The pledged sell-off of the Fed’s $4.5 trillion bond portfolio has gained positive reception from both Democratic and Republican congressmen and women alike and has been leading the Dow Jones industrial average to hit record highs. Yellen’s testimony is a sign of a robust and growing economy, according to Jeff Kravetz, regional investment strategist at the Private Client Reserve at U.S. Bank.

“We’re getting a positive reaction to her testimony,” Kravetz said in response to Yellen’s suggestions that the economy is in a stable and gradually growing state.

“After months of talking tough on rates, it appears that Janet Yellen has changed her tune. My belief is that the original hawkishness was contingent on a belief that pro-growth policy changes were right around the corner,” Jim Iuorio, managing director of TJM Institutional Services, said.

“However, this takes away one of stock markets primary worries, that the Fed would raise rates before the political landscape could be sorted out. In other words, this is a long way of saying the Fed’s got your back.” – Jim Iuorio

Yellen was able to reach a compromisable and even acceptable position with Republican lawmakers during her testimony, suggesting that the federal debt was a “big problem”, and that “…a key thing that Congress should be taking into account in designing fiscal policy is the need to achieve sustainability in the debt path over time.”

Yellen is to testify before the Senate Banking Committee on Thursday.

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