Federal Reserve Chair Janet Yellen said the central bank is likely to keep trimming asset purchases, even as policy makers monitor data to determine if recent weakness in the economy is temporary.
“Unseasonably cold weather has played some role,” she said in response to a question today from the Senate Banking Committee. “What we need to do, and will be doing in the weeks ahead, is to try to get a firmer handle on exactly how much of that set of soft data can be explained by weather and what portion, if any, is due to softer outlook.”
Yellen also signaled the Fed is moving away from its numerical threshold linking any decision to raise its benchmark interest rate to the level of unemployment. Her appearance before the Senate panel, delayed by a snowstorm in Washington, follows reports indicating that harsh weather contributed to weakness in retail sales, manufacturing and housing.
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