Sunday, April 20, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Yellen: Fed monitoring recent weaker economic data

WASHINGTON — Federal Reserve Chair Janet Yellen noted Thursday that recent economic data have pointed to weaker-than-expected gains in consumer spending and job growth. She said the Fed will be watching to see whether the slowdown proves only a temporary blip caused by severe winter weather.

Yellen’s comments gave encouragement to Wall Street. Investors read the remarks as offering at least a hint that the Fed might slow or suspend a pullback in its economic stimulus if the economy faltered.

“We have seen quite a bit of soft data over the last month or six weeks,” Yellen said, citing job growth, housing, retail sales and industrial production.

She said the Fed needs to “get a firmer handle on exactly how much of that set of soft data can be explained by weather and what portion, if any, is due to a softer outlook.”

In her remarks to the Senate Banking Committee, Yellen repeated the Fed’s previous assurances that its pullback in its bond purchases 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 adjusting 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.

Still, investors took heart from her comment that the Fed was concerned about the weaker economic data and watching to see if the slowdown was temporary or persistent.

In prepared testimony she gave two weeks ago to a House committee and on Thursday to the Senate panel, Yellen said the job market’s recovery is “far from complete” and that she expects Fed policies to favor low interest rates “for quite some time.”

Most economists say they expect the Fed to stick to its plan for a steady reductions in bond purchases unless the economy significantly weakens in coming months.

“The market is hopeful that they can count on her not to be too aggressive in tapering bond purchases,” said David Jones, chief economist at DMJ Advisors. “But in essence, she said she was not going to deviate from the policy course that has been set in terms of reductions in bond purchases.”

Yellen’s appearance Thursday completed her first twice-a-year report to Congress since becoming Fed chair this month. Her Senate appearance had been postponed by a snowstorm that shut federal offices in Washington on Feb. 13.

In both her House and Senate appearances, Yellen sought to emphasize policy continuity with her predecessor, Ben Bernanke, who stepped down last month after eight years as chairman. Yellen said that she, like Bernanke, believes the economy is strengthening enough for the Fed to gradually scale back its bond purchases.

The Fed has cut the pace of its purchases at both its most recent meetings. It reduced the original $85 billion monthly pace in December and again in January in $10 billion steps to a current level of $65 billion.

Many economists think that as long as the economy keeps improving, the Fed will keep cutting the bond purchases by $10 billion at each meeting this year until ending the program in December.

The Fed has stressed that it’s standing by a plan to keep a key short-term rate at a record low near zero for an extended period. At the past two meetings, it has said short-term rates will likely remain low “well past” the time unemployment drops below 6.5 percent. The unemployment rate is now 6.6 percent.

Many economists think the first rate hike won’t occur until late 2015. But minutes of the Fed’s last meeting showed that “a few” policymakers felt it might be appropriate to make the first move to raise short-term rates “relatively soon.”

The Fed has held its benchmark for short-term rates near zero since December 2008.

The discussion revealed in minutes of the Fed’s Jan. 28-29 meeting, released last week, drew the attention of financial markets. The “few” Fed officials who raised the possibility of a rate hike weren’t identified.

But some Fed officials have worried that the efforts to provide support for the economy through trillions of dollars in bond purchases and ultra-low rates could eventually spark inflation pressures.

But economists think this Fed group remains in the minority. Yellen and many other Fed officials say the economy still needs support from the Fed until the job market and economic growth improve further. They note that inflation remains well below the Fed’s 2 percent target.

The Associated Press

The Associated Press

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

Bay Area makes growth plans

By Barry Eberling | From Page: A1

 
Supervisor candidates vary on Plan Bay Area

By Barry Eberling | From Page: A1 | Gallery

Earth Day means cleanup Day for Suisun City

By Susan Hiland | From Page: A1, 1 Comment | Gallery

 
Hop to it: Couple lights up home, yard for Easter

By Amy Maginnis-Honey | From Page: C1

Ranking the best Bay Area athletes

By Brad Stanhope | From Page: A2

 
Piano scholarship competition set in Vallejo

By Susan Hiland | From Page: A3

The Edge hosts Easter egg hunt

By Adrienne Harris | From Page: A3

 
Alooma Temple keeps children in mind

By Adrienne Harris | From Page: A3 | Gallery

Fairfield author to speak at women’s expo

By Susan Hiland | From Page: A3

 
The resurrection has changed the lives of Christians

By Perry W. Polk | From Page: C3

 
Understanding your health insurance

By Morgan Westfall | From Page: D4

 
Armijo graduate completes basic training

By Nick DeCicco | From Page: C4

Highway 12 paving to slow traffic east of Rio Vista

By Adrienne Harris | From Page: A5

 
Record Store Day a commercial hit

By Adrienne Harris | From Page: A5 | Gallery

Easter egg hunt brings out the smiles

By Susan Hiland | From Page: A5 | Gallery

 
Dutch Bros. joins Fairfield coffee corridor

By Barry Eberling | From Page: B7 | Gallery

City sets plan to dispose of property assets

By Brian Miller and Karl Dumas | From Page: B7

 
Suisun City police log: April 17, 2014

By Susan Hiland | From Page: A12

Fairfield police log: April 17, 2014

By Susan Hiland | From Page: A12

 
.

US / World

Counties tell Brown they need money for his law

By The Associated Press | From Page: A1

 
San Francisco probe leading to entrapment claims

By The Associated Press | From Page: A6

Exhibit recreates Warhol’s 1964 World’s Fair mural

By The Associated Press | From Page: A10

 
NASA’s space station Robonaut finally getting legs

By The Associated Press | From Page: A10 | Gallery

Ohio couple married 70 years die 15 hours apart

By The Associated Press | From Page: A11 | Gallery

 
Documents detail another delayed GM recall

By The Associated Press | From Page: A11

At barricades, Ukraine insurgents await Easter

By The Associated Press | From Page: A13

 
Official: 3 bodies retrieved from inside ferry

By The Associated Press | From Page: A13 | Gallery

13th body pulled from snow in Everest avalanche

By The Associated Press | From Page: A13

 
Costa Rican a celebrity after certified miracle

By The Associated Press | From Page: A14 | Gallery

.

Opinion

Government … for the government?

By Bill James | From Page: A8

 
Editorial Cartoons for April 20, 2014

By Daily Republic Syndicated Content | From Page: A8

Question of the week: Will Flight 370 be found?

By Daily Republic | From Page: A8

 
Neighborhood speeders don’t get it

By Letter to the Editor | From Page: A8

Why would a person do this?

By Letter to the Editor | From Page: A8

 
Sound off for April 20, 2014

By Daily Republic | From Page: A8

 
Jeb Bush, love, and today’s GOP

By Ruben Navarrette | From Page: A9

Statistical frauds distort equal-pay debate

By Thomas Sowell | From Page: A9

 
Are government ‘carrots’ fair, worthwhile?

By Brian Thiemer | From Page: A9

 
.

Living

Community Calendar: April 20, 2014

By Susan Hiland | From Page: A2

 
Today in History for April 20, 2014

By The Associated Press | From Page: A2

Book details lives of cloistered nuns

By The Associated Press | From Page: C3

 
Bill Nye says he underestimated debate’s impact

By The Associated Press | From Page: C3

Horoscopes for April 20, 2014

By Holiday Mathis | From Page: D4

 
Pete spends weekends at my house but he never invites me to his

By Kathy Mitchell and Marcy Sugar | From Page: D4

.

Entertainment

Flea of Red Hot Chili Peppers has book deal

By The Associated Press | From Page: C2

 
Tartt, Goodwin finalists for Carnegie medals

By The Associated Press | From Page: C2

New book on fracking illuminates pros, cons

By The Associated Press | From Page: C2

 
PUBLISHERS WEEKLY BEST-SELLERS

By The Associated Press | From Page: C2

TVGrid

By Daily Republic Syndicated Content | From Page: B11

 
.

Sports

Kings, Sharks look to put Game 1 in past

By The Associated Press | From Page: B1 | Gallery

 
Stults, Padres hand Giants third straight loss

By The Associated Press | From Page: B1

A’s score 3 in 9th, rally past Astros 4-3

By The Associated Press | From Page: B1 | Gallery

 
Warriors beat Clippers 109-105 in playoff opener

By The Associated Press | From Page: B1 | Gallery

 
Hawks take 1-0 lead by rolling past Pacers 101-93

By The Associated Press | From Page: B2

Calathes suspension a reminder of supplement risk

By The Associated Press | From Page: B2

 
Raptors GM Ujiri uses profanity about Brooklyn

By The Associated Press | From Page: B2

Williams scores 24 as Nets beat Raptors 94-87

By The Associated Press | From Page: B2 | Gallery

 
Durant leads Thunder past Grizzlies 100-86

By The Associated Press | From Page: B2

Federer beats injured Djokovic to reach final

By The Associated Press | From Page: B3 | Gallery

 
Donald shoots 66, takes lead at RBC Heritage

By The Associated Press | From Page: B4

Big names among prospective Buffalo Bills buyers

By The Associated Press | From Page: B4

 
Indians set two new school records for track

By Daily Republic staff | From Page: B4

Wie shoots 67, wins LPGA LOTTE Championship

By The Associated Press | From Page: B4

 
Travis Bowl Highlights

By Daily Republic | From Page: B4

Rapids, Earthquakes play to scoreless tie

By The Associated Press | From Page: B4

 
Stars Recreation bowling results

By Daily Republic | From Page: B4

Jimenez leads Langer by 1 shot in Greater Gwinnett

By The Associated Press | From Page: B4

 
Award-winning archery champ shoots with his teeth

By The Associated Press | From Page: B6 | Gallery

Survivors keep busy as Boston Marathon approaches

By The Associated Press | From Page: B6

 
.

Business

US delays review of contentious Keystone pipeline

By The Associated Press | From Page: B7

 
Why high oil prices are actually good for airlines

By The Associated Press | From Page: B7

Subscription sample boxes shake up beauty routines

By The Associated Press | From Page: B8

 
Girls from modest families get lift in technology

By The Associated Press | From Page: B12

Haunted house part of San Antonio apartment lofts

By The Associated Press | From Page: B13

 
Recalls this week: lanterns, exercise devices

By The Associated Press | From Page: B13

Review: Siri-like Cortana fills Windows phone gap

By The Associated Press | From Page: B14

 
.

Obituaries

James Leroy Barbour

By Nancy Green | From Page: A4

 
William Paul Wehrly

By Nancy Green | From Page: A4

Sealwyn Shirley Brucefield Shepherd Malkiewicz

By Nancy Green | From Page: A4

 
Anne Irene Elizabeth Fulgoni

By Nancy Green | From Page: A4

Margaret Elizabeth Silva

By Susan Hiland | From Page: A4

 
Lloyd G. Hoffmeister

By Nancy Green | From Page: A4

Ramon Isidro

By Adrienne Harris | From Page: A4

 
Rogelio Tinoco-Zamudio

By Susan Hiland | From Page: A4

.

Comics