Janet Yellen to Senate: economic data is slower than expected

Fed Chair Janet Yellen tells Senate a hard winter may only partly explain the economy's recent weakness.
By Ananth Baliga  |  Feb. 27, 2014 at 2:14 PM
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WASHINGTON, Feb. 27 (UPI) -- U.S. stocks saw an uptick Thursday after Federal Reserve Chairwoman Janet Yellen testified before Congress, acknowledging that job and housing data were below expectations.

Yellen stuck to comments she made Feb. 11, when she testified before the House panel and reiterated that the Federal Reserve will continue to consider a reduction in its bond buying program. The bond buying program, referred to as quantitative easing, was designed to boost the markets and encourage spending, hiring and investment.

"Asset purchases are not on a preset course, so if there's a significant change in the outlook certainly we would be open to reconsidering, but I wouldn't want to jump to conclusions here," said Yellen.

She did acknowledge that recent reports have pointed to weaknesses in the economy, but said that it could have been because of the unusually harsh winter the country is facing this year.

"A number of data releases have pointed to softer spending than analysts had expected," Yellen said. "That may reflect in part adverse weather conditions, but at this point it is difficult to discern exactly how much."

Yellen said that the asset buying program was not on a set track and that she and officials at the Fed were constantly reassessing the situation and were open to reconsidering their strategy, but that it would take a "significant" change to initiate a course correction.

Yellen was to testify before the Senate on Feb. 13, but was it postponed due to a snowstorm in Washington D.C. It is highly unusual for there to be a two-week gap between the the Fed Chair's testimony before the two committees that oversee the central bank. U.S. stocks rebounded after Yellen's testimony and Standard & Poor’s 500 Index climbed 0.2 percent to 1,848.95.

[Businessweek] [Wall Street Journal]

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