|Janet Yellen gave her first public speech as Federal Reserve Chair Monday to Chicago community organizers, commenting on the Fed’s efforts to strengthen the U.S. job market.
The Bureau of Labor Statistic reports that employment has improved in 33 states, with the national jobless rate holding steady at 6.7% — the lowest it’s been since 2008. “But while there has been steady progress, there is also no doubt that the economy and the job market are not back to normal health,” Yellen said.
But many Americans are still struggling post-recession, particularly the unemployed and the underemployed, Yellen said. “The recovery still feels like a recession to many Americans, and it also looks that way in some economic statistics.”
Federal Reserve Helping to Create Jobs and Encourage American Workers, Says Janet Yellen
In her speech, Yellen said that two things were needed for an economic recovery to continue: “the courage and determination” of Americans facing economic hardship, and more jobs.
“The most important thing [the Federal Reserve does] is to use monetary policy to promote a stronger economy,” Yellen said. “…The Federal Reserve has taken extraordinary steps since the onset of the financial crisis to spur economic activity and create jobs, and … I believe those efforts are still needed.”
Yellen said the Fed will continue to influence interest rates, citing the following benefits of keeping rates low:
“Make homes more affordable and revive the housing market.”
“We are trying to make it cheaper for businesses to build, expand and hire.”
“We are trying to lower the costs of buying a car that can carry a worker to a new job and kids to school, and our policies are also spurring the revival of the auto industry.”
“We are trying to help families afford things they need so that greater spending can drive job creation and even more spending, thereby strengthening the recovery.”
The Fed’s policy to keep interest rates low will likely continue through 2015. While this means that deposit rates on savings accounts, certificates of deposit and other products will remain low, consumers can also capitalize on equally low auto loan and mortgage rates.