Global economic growth to boost US exports: Janet Yellen

The Dollar Business Bureau

Estimating a positive economic prospect for the US, Janet L Yellen, Chairwoman, Federal Reserve System Board has told the American lawmakers that the world growth is likely to boost the US exports.

“I expect that, with further gradual adjustments in the stance of monetary policy, the economy will continue to expand at a moderate pace over the next couple of years, with the job market strengthening somewhat further and inflation rising to 2%,” she told House Finance Services Committee members during a Congressional hearing.

“This judgement shows our view that the monetary policy continue to be accommodative. The present job gains would continue supporting the growth in incomes, thereby consumer spending. The world economic growth should further support US exports,” Yellen said.

She further said that the favourable financial environment, along with the prospects for further gains in local as well as international spending and the current revival of drilling activity, should continuously support the business investments.

Such developments should raise resource utilization further to some extent, thus fostering a more robust pace of increase in wage and price, she said.

However, she noted that considerable uncertainty in inflation always effect the economic outlook.

Probable changes in the fiscal and other policies by the US government represent other possible source of uncertainty, she added.

The Fed Chairwoman said that though the global economic prospects seem to have improved to some extent this year, but several trading partners of the US continue to face economic challenges.

“At present, I see roughly equal odds that the US economy’s performance will be somewhat stronger or somewhat less strong than we currently project,” she said.

Stating to the Congressional committee, she said that the Federal Reserve plans to cut its huge $4.5 trillion portfolio this year.

The reduction in balance sheet and increase in rates would be done gradually, she added.