President Barack Obama and Federal Reserve Chair Janet Yellen met in the Oval Office to discuss the state of the U.S. economy in the midst of slowed growth due to lower consumer spending. The president and Yellen touched on topics such as near and long-term growth outlook, the state of the labor market, inequality, and potential risks to the economy, both in the United States and globally.
According to a statement released from the White House Press Secretary Josh Earnest, they also discussed the significant progress that has been made through the continued implementation of Wall Street Reform to strengthen our financial system and protect consumers.
Bloomberg Politics reported that prior to their meeting, which was closed off to media, Earnest described Obama as "pleased" with Yellen,
Yellen has only met with the president once before in November 2014 when she was appointed to her position, the report stated.
Bloomberg Politics reported that, "The backdrop is an economy showing signs that it’s hit a soft patch. Consumers, who’ve been keeping growth afloat, reined in spending at the start of 2016, with auto sales last month slumping to the lowest level in a year. Weakening demand abroad and a relatively strong dollar are causing the trade deficit to grow and companies have cut output to trim bloated inventories."
According to the article, before the meeting, Earnest told reporters, "It’s an opportunity for them in some ways to trade notes on something they’re both looking at quite carefully," while emphasizing Yellen’s independence from the president.
He added, "The president has been pleased with the way she has fulfilled what is a critically important job."
The Federal Reserve’s historic liftoff in December left many to speculate when the Fed would raise the federal funds target rate again. So far this year, two Federal Open Market Committee (FOMC) meetings have come and gone with no further rate increase, and if Fed Chair Janet Yellen’s speech at the Economic Club of New York is any indication, it may be a while.
Yellen reiterated that the central bank expects that economic conditions in the U.S. will evolve in a manner that will “warrant only gradual increases” to the federal funds target rate and noted that along with labor market improvement, the FOMC expects only moderate growth for the medium term. She also pointed out that projections made by FOMC policy makers for economic growth, employment, and inflation in the March FOMC meeting are little changed from December.
“A key factor underlying such modest revisions is a judgment that monetary policy remains accommodative and will be adjusted at an appropriately gradual pace to achieve and maintain our dual objectives of maximum employment and 2 percent inflation,” Yellen said. “Reflecting global economic and financial developments since December, however, the pace of rate increases is now expected to be somewhat slower.”