Fed's Yellen testimony: Additional gradual rate hikes likely appropriate over next few years
|Key highlights from the pre-released text of the speech by Fed Chairwoman Janet Yellen's first part of 2-day semi-annual testimony in Congress:
- Monetary policy not on pre-set course
- FOMC expects additional gradual rate hikes likely appropriate over next few years
- Inflation response to economy is key uncertainty
- Fed funds rate remains somewhat below neutral level
- On Fed balance sheet: FOMC anticipates reducing Fed balances but larger than pre-financial crisis
- On Fed balance sheet: Does not intend to use balance sheet as active tool for monetary policy in normal times
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