This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

No. 2 Fed Official Praises New Fed Openness

By MARTIN CRUTSINGER

WASHINGTON (AP) â¿¿ The No. 2 official at the Federal Reserve says she hopes the old days of extreme secrecy surrounding the Federal Reserve are gone forever.

Janet Yellen, vice chair of the Fed, said Thursday that the Fed's old policy of not even telling financial markets when it had changed a key interest rate has given way to one of using communications to enhance interest-rate policies.

"I hope and trust that the days of 'never explain, never excuse' are gone for good and that the Federal Reserve continues to reap the benefits of clearly explaining its actions to the public," Yellen said at a conference sponsored by the Society of American Business Editors and Writers.

The Fed in December for the first time linked changes in a key short-term rate to a drop in unemployment below 6.5 percent, as long as inflation remains modest. The Fed is also buying $85 billion per month in bonds to keep downward pressure on long-term rates.

Yellen said she expects both policies to remain in effect for a considerable period because unemployment remains high. She said the central bank should keep pursing low interest rates to stimulate the economy until unemployment returns to more normal levels.

"With unemployment so far from its longer-run normal level, I believe progress on reducing unemployment should take center stage ... even if maintaining that progress might result in inflation slightly and temporarily exceeding 2 percent," Yellen said.

The Fed has set 2 percent as its target for inflation but has stated that it was willing to keep pursuing aggressive economic stimulus measures as long as long-term inflation expectations do not rise above 2.5 percent.

Yellen has been a strong supporter of Fed Chairman Ben Bernanke's efforts to keep stimulating the economy. At its last meeting in March, the Fed voted to continue those policies on an 11-1 vote. However, some regional Fed bank presidents who are not voting members of the Fed's interest-rate panel this year have expressed concerns that the central bank's polices are risking future inflation troubles and could create dangerous asset bubbles.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs