Federal Reserve Chair Janet Yellen gave the U.S. economy a nearly clean bill of health, two days before Donald Trump arrives at the White House.
“Now, it’s fair to say, the economy is near maximum employment and inflation is moving toward our goal,” Yellen said in a speech Wednesday in San Francisco Wednesday, where she was detailing the purpose of the Fed.
She touted the economy’s performance over the last several years, noting that over 15 million jobs had been added since 2010, and that unemployment had dropped to 4.7% from 10% in 2009.
But she admitted the economy’s recovery has “been a long, slow slog.”
Yellen reiterated that she and other Fed leaders expect to raise rates a “few times a year” until 2019.
As recently as December, 11 of the 17 members of the Fed estimated they would raise rates three or more times in 2017.
However, she emphasized that forecast could change significantly depending on the economy’s performance in the Trump era. Some Fed leaders believe Trump’s plans to spend big on infrastructure could push inflation higher, which would make the Fed raise rates faster.
She made no reference to Trump, who heavily criticized her during the campaign. Trump said in September Yellen should be “ashamed of herself” for keeping interest rates so low.
Yellen spent much of her speech explaining the purpose of the Fed and the impact of its policy on ordinary Americans.
Rising interest rates “means that, although the interest rates you pay on, say, your auto loan or mortgage or credit card likely will creep higher, they probably will not increase dramatically.”
While Yellen did not mention Trump or other Republicans who have criticized the Fed, she noted that an independent central bank is best for the U.S. economy.
“The structure established for the Federal Reserve back then intentionally insulates us from short-term political pressures so we can focus on what’s best for the American economy in the longer run,” Yellen concluded.
