U.S. Federal Reserve Chair Janet Yellen said Monday that there remains considerable slack in the labor market, so the central bank remains committed to providing extraordinary support for the economy for some time to come.
"Since late 2008, the Fed has taken extraordinary steps to revive the economy. Recent steps to reduce the rate of new securities purchases are not a lessening of this commitment, only a judgment that recent progress in the labor market means our aid for the recovery need not grow as quickly." Yellen said at the 2014 National Interagency Community Reinvestment Conference in Chicago, Illinois.
"I think this extraordinary commitment is still needed and will be for some time, and I believe that view is widely shared by my fellow policymakers at the Fed," she said.
Yellen's remarks aim to quell fears of recovery being disrupted by the earlier-than-expected rates increase, after she signalled on March 19 that the first interest rates hike may happen as early as next Spring.
Noting that the economy and the job market are far from normal, Yellen said that the recovery still feels like a recession to many Americans, and it also looks that way in some economic statistics.
At 6.7 percent, the national unemployment rate is still higher than it ever got during the 2001 recession, she said, stressing that the job market is "tougher" now than in any recession.
To shore up the economy, Fed has been providing liquidity to help avert a collapse of the financial system, cutting short-term interest rates as low as they can, and purchasing large quantities of longer-term securities in order to put additional downward pressure on longer-term interest rates.
Since January, Fed had decided to trim the monthly bond buying by 10 billion U.S. dollars, and reaffirmed that a highly accommodative stance of monetary policy remained appropriate.