FED Chairwoman Janet Yellen

At the hearings of the House Financial Services Committee, FED Chairwoman Janet Yellen mentioned positive signals in the US economy including strong increase in job creation and family income. She said inflation reduction is temporary and FED has closely followed further developments to ensure the indicator at 2%.

She reiterated her previous statement that the US economy has improved and it won’t need special capital support from the FED as in the 2008 financial crisis. The US economy recorded a growth rate of 1.4 percent in the first quarter of this year. It has recovered faster in recent months thanks to more job creation and the revival of investment projects. FED Chairwoman has warned that there remains instability relating to low inflation rate and a question about whether the Senate will approve President Trump’s economic programs. She said while the global economy seems to be rebounding strongly, some trading partners of the US continue to face challenges.

At the hearings, the FED Chairwoman repeated a plan to cut the FED’s holdings of bonds and other securities guaranteed by real estate deposits worth about 4 trillion USD which it bought during the financial crisis from 2007 to 2009 to pump money into the economy.  On June 14, the FED decided to raise interest rate 0.25% to a new range of 1 to 1.25%. The 2 previous rate hikes were in December, 2016, and March, 2017, amid positive signals from the economy.