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January 09, 2014

Yellen Sees US Economy Accelerating in 2014

by VOA News

Janet Yellen, who is set to take over as chief of the Federal Reserve next month, says she sees the American economy accelerating this year.
 
Yellen told Time magazine: "I think we'll see stronger growth this year." She said policy makers at the powerful U.S. central bank are hopeful that the U.S. economy will grow by 3 percent or more in 2014.
 
The U.S. economy advanced by 2.6 percent through the first nine months of last year, but recorded 4.1 percent growth in the July-to-September period. While economists say the fourth quarter advance may not have been as fast, the U.S. central bank says the country's economy continued to expand at a moderate pace in the last weeks of 2013.
 
The 67-year-old Yellen will be the first woman to chair the Federal Reserve in its century-long existence, succeeding Ben Bernanke as his eight-year tenure expires at the end of January. As head of the central bank overseeing the world's largest economy, her views could play an important role in global economic circles.
 
In the interview with Time, Yellen said the U.S. recovery from its steep recession in 2008 and 2009 "has been frustratingly slow." But she said the U.S. is "making progress in getting people back to work" and that the Fed expects that the country's inflation rate will edge higher toward the bank's 2 percent goal.
 
Yellen's views about the advancing U.S. economy are shared by others, including James Glassman, the chief economist at JPMorgan Chase, the country's biggest bank. He told VOA he expects that as economic problems ease in Europe and in the U.S., the American economy will grow by 3-and-a-quarter percent or more this year and even faster next year.
 
"The main thinking there is the European crisis is fading," he said. "Europe may not be growing that rapidly, but it is a distinct difference from last year. The housing problems in the U.S. seem to be behind us. And the fiscal sector, which has been pretty much of a drag for the last several years, seems as though that's beginning to settle down. So, a lot of reasons to think that 2014 should be a better year, a faster year of growth."
 
Yellen defended the Federal Reserve's lengthy program to buy billions of dollars of securities to pump more money into the U.S. economy, purchases it is now starting to trim as the U.S. economy improves. Yellen noted that critics of the program say it "is just helping rich people," but she said the purchase of securities has helped hold down long-term interest rates and encouraged consumer spending.