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Yellen: Fed checking recent weak economic data

February 27, 2014 News Extra

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WASHINGTON — Federal Reserve Chair Janet Yellen said this morning that some recent economic data have pointed to weaker-than-expected gains in consumer spending and job growth.

She said the Fed will watch to see whether the slowdown proves only a temporary blip caused by severe winter weather.

Yellen told the Senate Banking Committee that the Fed will be alert to upcoming data to make sure that the economy keeps strengthening.

“We have seen quite a bit of soft data over the last month or six weeks,” Yellen said. “We need to get a firmer handle about how much of the softer data can be explained by the weather.”

Responding to a question, Yellen repeated the Fed’s assurances that its pullback in stimulus for the economy is “not on a preset course” and could be modified if there was a “significant change” in the Fed’s outlook. The Fed is gradually reducing its monthly bond purchases, which have been intended to keep long-term loan rates low to encourage spending and growth.

Yellen said that while she was open to changing the pace of the Fed’s reductions in bond purchases, “I wouldn’t want to jump to conclusions” that such a change will be needed.

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