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Yellen says Fed has more work to do to support recovery

(Xinhua)    08:06, November 15, 2013
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WASHINGTON, Nov. 14 -- The Federal Reserve has more work to do to bolster the economy which is performing far short of potential, Janet Yellen, President Barack Obama's nominee to lead the U.S. central bank, said Thursday.

"A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases," Yellen, currently the Fed's vice chair, said in prepared remarks to the Senate Banking Committee.

"I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy," she said.

Yellen said that although the U.S. economy is significantly stronger and continues to improve, the nation has "farther to go to regain the ground lost in the crisis and the recession."

"Unemployment is down from a peak of 10 percent, but at 7.3 percent in October, it is still too high, reflecting a labor market and economy performing far short of their potential," she added.

She also voiced concerns that the inflation has been running below the Fed's goal of 2 percent and is expected to continue to do so for some time.

"For these reasons, the Federal Reserve is using its monetary policy tools to promote a more robust recovery," Yellen said.

She also paid tribute to current Chairman Ben Bernanke, saying that under his wise and skillful leadership, the Fed helped stabilize the financial system, arrest the steep fall in the economy and restart growth.

Lawmakers in the banking committee will weigh Yellen's nomination and likely hold a vote in the coming weeks before sending the nomination to the full Senate, which will vote to confirm her. If confirmed by the Senate, Yellen will take the helm after Bernanke's term expires at the end of January 2014, and become the first woman to lead the Fed.

The leadership transition comes at a pivotal moment of the Fed. After stimulating the economy for five years following the financial crisis, the Fed needs to wind down its asset purchases and gradually normalize its policy with good timing.

(Editor:LiangJun、Yao Chun)

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