Federal Reserve Chair Janet Yellen was in Congress on Tuesday for the first day of her semiannual testimony on monetary policy.
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YELLEN: Waiting too long to raise interest rates is 'unwise' and could cause a recession
Federal Reserve Chair Janet Yellen is back in Congress on Tuesday for the first day of her semiannual testimony on monetary policy.
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In her prepared speech to the Senate Banking Committee, Yellen said the central bank can continue to raise interest rates slowly although it would be "unwise" to wait too long.
The Fed has indicated that there could be three rate increases in 2017, which would lift interest rates further away from the ultra-low floor that the financial crisis necessitated. Yellen declined to specify whether March was on the table for a rate hike.
The Fed's outlook remains nimble and open to adapting to changing economic circumstances. One key thing the Fed is watching is the fiscal policy promised by the new administration, which could accelerate economic growth and inflation faster than expected.
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Yellen said while the US budget deficit is a longstanding issue, some fiscal policies being discussed could lift it even more.
Dodd-Frank
The big issue put to Yellen was financial regulation, specifically the future of the Dodd-Frank financial reforms created after the Great Recession. This was Yellen's first congressional testimony since President Donald Trump took office and started the process of scaling back reforms that the Fed helped to implement.
Last week, Daniel Tarullo,
Yellen will testify in front of the House Financial Services Committee on Wednesday.
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