Yellen states support for Fed’s bond buying
WASHINGTON – Janet Yellen says a “strong majority” of Federal Reserve officials think the Fed’s low-interest-rate policies have supported a still-recovering U.S. economy.
Responding to questions from members of the Senate Banking Committee, Yellen said the U.S. economy would likely be weaker if the central bank had not acted aggressively.
Yellen’s responses were released Wednesday, one day before the committee is expected to vote to back her nomination to succeed Ben Bernanke as Fed chairman.
In letters to the committee, Yellen defended the Fed’s monthly bond purchases, which have been intended to keep long-term rates down to encourage borrowing and spending. Critics have charged that the bond purchases haven’t helped the economy and have raised the risks of high inflation or asset bubbles.