Federal reserve Chairman Janet Yellen in the first day of the two-day semiannual report to Congress told about “significant uncertainty” in the Outlook for the U.S. economy and the risks of a British referendum.
In her speech, Janet Yellen has Avila about what the fed would like to change how the video source of interest rates “with caution,” noting the conservation of the risks in the global economy and uncertainty in the U.S. economy.
“About the us economic Outlook remains a significant uncertainty. The latest data on the labor market and weak rates of investment are an example of the risks of weakening domestic demand. Furthermore, while I hold the optimistic estimates about the long term prospects of the US economy, however, we cannot exclude the possibility, already marked by a number of prominent economists, which assumes the continuation of productivity growth such as low rates, as we have seen in recent years.
In the global economy also remain vulnerable to the elements. Despite the fact that we see a reduction of concerns about a slowdown in China and falling commodity assets, China is still facing serious challenges in terms of rebalancing the economy from export-led growth to growth based on domestic demand and consumption. In a broader context it can be noted that in the current environment of slow economic growth, low inflation and very accommodating monetary policies in many developed countries, the perception of risks by investors, and the appetite for risky game can undergo dramatic changes.
One of the factors that can affect the mood of investors is the upcoming referendum in the UK. A variant in which the UK will vote for secession from the European Union may have serious economic consequences.
Based on the above factors, the Committee continues to closely monitor developments in the global economy and the financial sector, as well as the potential consequences for domestic economic activity, labour market and inflation.
Action by the Committee reflect a careful evaluation of the appropriate course of monetary policy given the inflation rate remaining below the target, as well as mixed data on the labor market and economic growth in the US this year.”
