DENVER (Reuters) - reserve Federal Vice President Janet Yellen Saturday defended program controversial Central Bank to acquire assets in order to stimulate the economy, citing an internal study showing that the full program will result in a gain of 3 million jobs.
"It will not be a panacea, but I think it will be effective to promote the maximum employment and price stability" Yellen said while participating in a panel of experts for a Conference of the economy.
Plane the Fed buying goods announced at the beginning of November - nicknamed de2, because it is the second round of the quantitative easing - Fed had attracted critical nationally, internationally and even in the Fed itself, the weakening of the dollar and risking dangerous inflation.
Yellen, defence appeared aims to destroy all these critics, said a simulation approaching the asset purchase program latest has been shown to generate approximately 700,000 new jobs.
This exercise assumed purchasing $ 600 billion in treasuries to longer term, their detention for about two years and then conduct the position in the next five years.
The study also indicates that inflation is currently higher percentage point would have been the case, implying that if the Fed had not purchased titles long term after cutting interest rates to near zero in December 2008, the economy would now close to a damaging deflationary spiral.
Yellen, who became Vice President of the Fed in October, was known to be a strong supporter of energetic measures to strengthen economic growth in his position previous President of the San Francisco Fed. It concerns de2 will cause inflation, imbalances, or having a damaging competitive devaluation are lost.
Addressing a default cited by critics, that the program is falling short in its objective to reduce the yields on securities Treasury Yellen said that, although rates are higher at the beginning of the program, they are lower than they would have otherwise been long term. She also yields are higher, because now investors expect a more robust recovery.
Apparent scale-back by investors of the expectations that the Fed won't expand the program beyond its supports of planned end mid-year argument that purchases have helped maintain lower rates, Yellen says.
She noted that policy-making federal open market Committee the Fed is not only about 2% higher inflation and can and will act quickly to respond to any increase in inflation.
"The Committee remains resolutely committed to price stability and does not seek inflation above 2% or a little less than that, most FOMC participants see as compatible with the mandate of the Federal Reserve," she says.
(Reporting by Mark Felsenthal.) (Editing by Leslie Adler)
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