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In her first and only interview as Fed chief, the economist says why she thinks the housing market is back on track, companies will invest, and more new jobs are on the way this year. She now has the world's largest economy in her hands
In her first and only interview since being confirmed as Federal Reserve Chair, Janet Yellen speaks in-depth to TIME about her outlook on the U.S. economy, the future of the Fed's controversial Quantitative Easing program, as well as what role she thinks the Fed should take in oversight, inequality and unemployment in America.
Yellen on the American economy: "I think we'll see stronger growth this year. Most of my colleagues on the Fed's policymaking committee and I are hopeful that the first digit [of GDP growth] could be 3 rather than 2... The recovery has been frustratingly slow, but were making progress in getting people back to work, and I anticipate that inflation will move back toward our longer-run goal of 2 percent." On the housing market, which had a brief lull this fall: "I expect it to pick back up and I do expect a further recovery."
On the Fed's QE program: "You know, a lot of people say, this [asset buying] is just helping rich people. But it's not true. Our policy is aimed at holding down long-term interest rates, which supports the recovery by encouraging spending. And part of the [economic stimulus] comes through higher house and stock prices, which causes people with homes and stocks to spend more, which causes jobs to be created throughout the economy and income to go up throughout the economy."
On banking reform: "I think Dodd-Frank is good roadmap and lays out most of the steps that are necessary. But we may also need to take some further steps that have not been taken yet."