The Federal Reserve has prioritized improving the job market but a high ranking official said that the task could take several years. Janet Yellen, who is the vice chairwoman of the Federal Reserve Board and number two in command to Ben Bernanke, Said that the Fed should continue on making policies that would boost the economy and the job market.
Yellen is known as the inflation dove. She is concerned about the weak job market than the possibility of prices increasing rapidly. Inflation hawks, who belong to the opposite side of the spectrum, have criticized the Fed’s policies for weakening the dollar.
Yellen responded to the critics by saying that it was only appropriate to place jobs in the spotlight. She cited the unemployment rate of 7.9 percent and poverty rate at 15 percent as indicators that both the Fed and Congress have a lot to work to do to improve the economy. She said that the Fed have their foot on the gas in trying to get the economy of the US moving.
Yellen said that the numbers mentioned above were not just statistics to her. She added that long-term unemployment has a large impact on workers and their families.
The Fed implemented policies that kept interest rates at record lows and entail purchasing $85 billion per month in Treasuries and mortgage-backed securities. The agency tried to reduce interest rates even further than present rates.
The hope is that by making loans cheaper for businesses and consumers, they would spend more on cars, homes, and other items. Yellen said that these steps will push demand higher. The more demand, the more jobs to be generated.
