More Easing Possible Says Fed’s Yellen

Janet L. Yellen, vice-chair of the Federal Reserve board of governors, told an audience in San Francisco that the Fed has the ability to do more to aid the US economic recovery:

[T]he scope remains to provide additional accommodation through enhanced guidance on the path of the federal funds rate or through additional purchases of longer-term financial assets.

Yellen also said that the US needs an “approach to fiscal policy that puts in place a well-timed and credible plan to bring deficits down to sustainable levels over the medium and long terms while also addressing the economy’s short-term needs.”

She also called for more effort to help the “dysfunctionl housing market” in the US and made a special note of jobs, saying that the “outlook is for unemployment to diminish only slowly, remaining painfully high for many years to come.”

The text of Yellen’s speech is available here.