“Productivity depends on many factors, including our workforce’s knowledge and skills and the quantity and quality of the capital, technology, and infrastructure that they have to work with.”
― Janet Yellen
“Efforts to promote financial stability through adjustments in interest rates would increase the volatility of inflation and employment. As a result, I believe a macro-prudential approach to supervision and regulation needs to play the primary role.”
― Janet Yellen
“Access to capital is important for all firms, but it’s particularly vital for startups and young firms, which often lack a sufficient stream of earnings to increase employment and internally finance capital spending.”
― Janet Yellen
“After adjusting for inflation, the average income of the top 5% of households grew by 38% from 1989 to 2013. By comparison, the average real income of the other 95% of households grew less than 10%.”
― Janet Yellen
“People stop buying things, and that is how you turn a slowdown into a recession.”
― Janet Yellen
“There is always some chance of recession in any year. But the evidence suggests that expansions don’t die of old age.”
― Janet Yellen
“If there is a job that you feel passionate about, do what you can to pursue that job; if there is a purpose about which you are passionate, dedicate yourself to that purpose.”
― Janet Yellen
“The trust institutions have in the marketplace, the confidence customers and suppliers and workers and employees have, are very important to a business’s effectiveness.”
― Janet Yellen
“Many financial innovations such as the increased availability of low-cost mutual funds have improved opportunities for households to participate in asset markets and diversify their holdings.”
― Janet Yellen
“The Global Financial Crisis and Great Recession posed daunting new challenges for central banks around the world and spurred innovations in the design, implementation, and communication of monetary policy.”
― Janet Yellen
“I want to be completely clear that I strongly oppose ‘Audit the Fed.’”
― Janet Yellen
“In the long run, outsourcing is another form of trade that benefits the U.S. economy by giving us cheaper ways to do things.”
― Janet Yellen
“I’ve been collecting rocks since I was 8 and have over 200 different specimens.”
― Janet Yellen
“Policy makers should be compelled to take action given the serious costs of long-term unemployment when overall unemployment is already high. A week of unemployment is worse when it is experienced as part of a longer spell.”
― Janet Yellen
“Housing wealth – the net equity held by households, consisting of the value of their homes minus their mortgage debt – is the most important source of wealth for all but those at the very top.”
― Janet Yellen
“Transparency concerning the Federal Reserve’s conduct of monetary policy is desirable because better public understanding enhances the effectiveness of policy. More important, however, is that transparent communications reflect the Federal Reserve’s commitment to accountability within our democratic system of government.”
― Janet Yellen
“In the five years since the end of the Great Recession, the economy has made considerable progress in recovering from the largest and most sustained loss of employment in the United States since the Great Depression.”
― Janet Yellen
“Sometimes you have to make decisions without knowing all that you would like to know That’s part of the job.”
― Janet Yellen
“Audit the Fed is a bill that would politicize monetary policy, would bring short-term political pressures to bear on the Fed. In terms of openness about our financial accounts, we are extensively audited.”
― Janet Yellen
“As always, it would be important to ensure that any fiscal policy changes did not compromise long-run fiscal sustainability.”
― Janet Yellen
“The future path of the federal funds rate is necessarily uncertain because economic activity and inflation will likely evolve in unexpected ways. For example, no one can be certain about the pace at which economic headwinds will fade. More generally, the economy will inevitably be buffeted by shocks that cannot be foreseen.”
― Janet Yellen
“While admirers of capitalism, we also to a certain extent believe it has limitations that require government intervention in markets to make them work.”
― Janet Yellen
“By putting downward pressure on interest rates, the Fed is trying to make financial conditions more accommodative – supporting asset values and lower borrowing costs for households and businesses and thus encouraging the spending that spurs job creation and a stronger recovery.”
― Janet Yellen
“I’m just opposed to a pure inflation-only mandate in which the only thing a central bank cares about is inflation and not employment.”
― Janet Yellen
“In 1977, when I started my first job at the Federal Reserve Board as a staff economist in the Division of International Finance, it was an article of faith in central banking that secrecy about monetary policy decisions was the best policy: Central banks, as a rule, did not discuss these decisions, let alone their future policy intentions.”
― Janet Yellen
“Strapped by tight credit and plummeting sales, businesses have overhauled the way they manage supply chains, inventory, production practices and staffing.”
― Janet Yellen
“Although most Americans apparently loathe inflation, Yale economists have argued that a little inflation may be necessary to grease the wheels of the labor market and enable efficiency-enhancing changes in relative pay to occur without requiring nominal wage cuts by workers.”
― Janet Yellen
“Models used to describe and predict inflation commonly distinguish between changes in food and energy prices – which enter into total inflation – and movements in the prices of other goods and services – that is, core inflation.”
― Janet Yellen
“When I was very young, my father had an accident. He fell down a flight of stairs, fractured his skull, and lost sight in one eye.”
― Janet Yellen
“U.S. economic activity continues to expand, led by solid growth in household spending. But business investment remains soft, and subdued foreign demand and the appreciation of the dollar since mid-2014 continue to restrain exports.”
― Janet Yellen
“It certainly would be helpful going forward for deficit reduction efforts to focus on the medium term while not subtracting from the impetus we need to keep a fragile economy moving forward.”
― Janet Yellen
“Stronger productivity growth would tend to raise the average level of interest rates and, therefore, would provide the Federal Reserve with greater scope to ease monetary policy in the event of a recession.”
― Janet Yellen
“Monetary policy ultimately must be conducted in a pragmatic manner that relies not on any particular indicator or model but, instead, reflects an ongoing assessment of a wide range of information in the context of our ever-evolving understanding of the economy.”
― Janet Yellen
“Monetary policy will, as always, respond to the economy’s twists and turns so as to promote, as best as we can in an uncertain economic environment, the employment and inflation goals.”
― Janet Yellen
“It slightly worries me that when people find a problem, they rush to judgment of what to do.”
― Janet Yellen
“Firms don’t just try to pay as little as possible to get the needed bodies on board; when there is unemployment, they ask themselves how wage cuts would affect the behavior of the employees. Would they quit or feel dissatisfied and work less hard on the firm’s behalf if they feel that wage policies are unfair?”
― Janet Yellen
“When you’re unemployed for six months or a year, it is hard to qualify for a lease, so even the option of relocating to find a job is often off the table.”
― Janet Yellen
“Individuals out of work for an extended period can become less employable as they lose the specific skills acquired in their previous jobs and also lose the habits needed to hold down any job.”
― Janet Yellen
“Long-term unemployment can make any worker progressively less employable, even after the economy strengthens.”
― Janet Yellen
“Stores don’t order merchandise unless they think they can sell it right away. Manufacturers and builders don’t produce unless they have buyers lined up. My business contacts describe this as a paradigm shift and they believe it’s permanent.”
― Janet Yellen
“I am anxious to fix welfare. There has to be more training and child care.”
― Janet Yellen
“Will capitalist economies operate at full employment in the absence of routine intervention? Certainly not. Are deviations from full employment a social problem? Obviously.”
― Janet Yellen
“We need to increase the transparency of shadow banking markets so that authorities can monitor for signs of excessive leverage and unstable maturity transformation outside regulated banks.”
― Janet Yellen
“Productivity growth, however it occurs, has a disruptive side to it. In the short term, most things that contribute to productivity growth are very painful.”
― Janet Yellen
“Inequality has risen to the point that it seems to me worthwhile for the U.S. to seriously consider taking the risk of making our economy more rewarding for more of the people.”
― Janet Yellen
“To me, a wise and humane policy is occasionally to let inflation rise even when inflation is running above target.”
― Janet Yellen
“Uncertainty about sales impedes business planning and could harm capital formation just as much as uncertainty about inflation can create uncertainty about relative prices and harm business planning.”
― Janet Yellen
“Business students are very oriented to playing a role in the real world and accomplishing something, not training themselves to be scholars and contribute to the literature. Teaching in that kind of environment has focused me much more on the real world, how pieces of the theory I know can be applied to real-world situations.”
― Janet Yellen
“In government institutions and in teaching, you need to inspire confidence. To achieve credibility, you have to very clearly explain what you are doing and why. The same principles apply to businesses.”
― Janet Yellen
“One common way of judging whether housing’s price is in line with its fundamental value is to consider the ratio of housing prices to rents. This is analogous to the ratio of prices to dividends for stocks.”
― Janet Yellen
“My bottom line is that monetary policy should react to rising prices for houses or other assets only insofar as they affect the central bank’s goal variables – output, employment, and inflation.”
― Janet Yellen
“A clear lesson of history is that a ‘sine qua non’ for sustained economic recovery following a financial crisis is a thoroughgoing repair of the financial system.”
― Janet Yellen
“The principle that a central bank, charged with controlling inflation, should be independent from the government is unassailable. It may also be true that it’s easier for the central bank to guard its independence from political pressure when it mainly holds government securities.”
― Janet Yellen
“A crucial responsibility of any central bank is to control inflation, the average rate of increase in the prices of a broad group of goods and services.”
― Janet Yellen
“Food and energy account for a significant portion of household budgets, so the Federal Reserve’s inflation objective is defined in terms of the overall change in consumer prices.”
― Janet Yellen
“The Federal Reserve ranks among the most transparent central banks. We publish a summary of our balance sheet every week. Our financial statements are audited annually by an outside auditor and made public. Every security we hold is listed on the website of the Federal Reserve Bank of New York.”
― Janet Yellen
“Nationally, the share of mortgages that are underwater fell by about one-half between 2011 and 2014.”
― Janet Yellen
“At the federal level, the fiscal stimulus of 2008 and 2009 supported economic output, but the effects of that stimulus faded; by 2011, federal fiscal policy actions became a drag on output growth when the recovery was still weak.”
― Janet Yellen
“The Federal Reserve’s objectives of maximum employment and price stability do not, by themselves, ensure a strong pace of economic growth or an improvement in living standards. The most important factor determining living standards is productivity growth, defined as increases in how much can be produced in an hour of work.”
― Janet Yellen
“Labor force participation peaked in early 2000, so its decline began well before the Great Recession. A portion of that decline clearly relates to the aging of the baby boom generation. But the pace of decline accelerated with the recession.”
― Janet Yellen
“The Federal Open Market Committee (FOMC) is committed to policies that promote maximum employment and price stability, consistent with our mandate from Congress.”
― Janet Yellen
“We necessarily operate in an environment in which there’s a great deal of uncertainty. In such an environment, it makes sense to use a risk-management approach to identify and avoid the big mistakes. That’s one reason I favor a cautious approach.”
― Janet Yellen
“We are focused on Main Street, on supporting economic conditions – plentiful jobs and stable prices – that help all Americans.”
― Janet Yellen
“We’re charged by Congress with regulating financial institutions. We take that mission seriously. We are tough supervisors and regulators.”
― Janet Yellen
“If we were to raise interest rates too steeply, and we were to trigger a downturn or contribute to a downturn, we have limited scope for responding, and it is an important reason for caution.”
― Janet Yellen
“Although we work through financial markets, our goal is to help Main Street, not Wall Street.”
― Janet Yellen
“It’s pretty rare to just talk to people who are having a tough time in the economy, to hear their individual stories.”
― Janet Yellen
“My parents were born in 1906 and 1907. I think the experience of the Depression greatly influenced the way they thought about the world.”
― Janet Yellen
“It’s appropriate for the Fed to gradually and cautiously increase our overnight interest rate over time.”
― Janet Yellen
“Increased business sales would almost certainly raise the productive capacity of the economy by encouraging additional capital spending, especially if accompanied by reduced uncertainty about future prospects.”
― Janet Yellen
“If strong economic conditions can partially reverse supply-side damage after it has occurred, then policymakers may want to aim at being more accommodative during recoveries than would be called for under the traditional view that supply is largely independent of demand.”
― Janet Yellen
“New policy tools, which helped the Federal Reserve respond to the financial crisis and Great Recession, are likely to remain useful in dealing with future downturns.”
― Janet Yellen
“Our ability to predict how the federal funds rate will evolve over time is quite limited because monetary policy will need to respond to whatever disturbances may buffet the economy.”
― Janet Yellen
“Some degree of inequality in income and wealth, of course, would occur even with completely equal opportunity because variations in effort, skill, and luck will produce variations in outcomes.”
― Janet Yellen
“An important factor influencing intergenerational mobility and trends in inequality over time is economic opportunity.”
― Janet Yellen
“Social safety-net spending is an important form of public funding that helps offset disparities in family resources for children.”
― Janet Yellen
“Academia is very flexible, but I had a spouse who was very committed to being a completely full partner in our marriage. I think if you counted up how many hours each one of us logged in, he certainly gets more than 50%.”
― Janet Yellen
“We have put in place policies through supervision and regulation that has greatly enhanced the safety and soundness of the banking system.”
― Janet Yellen
“We will watch very carefully what is happening in the economy and adjust policies appropriate.”
― Janet Yellen
“I continue to think many of the factors holding down inflation are transitory… We want to be careful not to jump to a premature conclusion about what’s in store for the U.S. economy.”
― Janet Yellen
“The financial sector is vital to the economy. A well-functioning financial sector promotes job creation, innovation, and inclusive economic growth.”
― Janet Yellen
“Expanded credit access has helped households maintain living standards when suffering job loss, illness, or other unexpected contingencies.”
― Janet Yellen
“Housing is a relatively small sector of the economy, and its decline should be self-correcting.”
― Janet Yellen
“I am strongly committed to pursuing the dual goals that Congress has assigned us: maximum employment and price stability.”
― Janet Yellen
“In effect, there has been a significant shortfall in the overall amount of monetary policy stimulus since early 2009.”
― Janet Yellen
“I don’t feel that I’ve faced discrimination. I’ve had every chance to succeed and more, and I think that’s what all women should have.”
― Janet Yellen
“Over a long period of time, technological change is something that has been important in reducing manufacturing employment – absolutely and as a share of jobs in the economy.”
― Janet Yellen
“For decades, the pace of technological change in manufacturing has outstripped that in the economy as a whole. And, so, firms – manufacturing firms – have found it easier to continue producing by – with – reducing their workforces.”
― Janet Yellen
“There were a lot of manufacturing jobs lost over a long period of time and particularly after – during the Great Recession. We’ve had some recovery in manufacturing employment as the economy’s recovered.”
― Janet Yellen
“It’s important for market participants to have a sense of how we think about the economy and the appropriate path of policy, to look at incoming data, and to form their own judgments as to whether or not changes in policy would be appropriate.”
― Janet Yellen
“In my junior year, I studied geology on Saturday mornings at the Museum of Natural History. Mineralogy has always been a major interest.”
― Janet Yellen
“I studied piano for seven years and play for my own enjoyment.”
― Janet Yellen
“Firms are not always willing to cut wages, even if there are people lined up outside the gates to work. So why don’t they?”
― Janet Yellen
“When you hire a nanny, the question you ask yourself is, ‘What’s best for my precious child?’ And do you really want someone who feels that your motive in life is to minimize the amount you spend on your child?”
― Janet Yellen
“I felt that the Fed had always been the agency that picked up the pieces when there was a financial crisis, and it was invented to do exactly that.”
― Janet Yellen
“My advice would be, as you consider fiscal policies, to keep in mind and look carefully at the impact those policies are likely to have on the economy’s productive capacity, on productivity growth, and to the maximum extent possible, choose policies that would improve that long-run growth and productivity outlook.”
― Janet Yellen
“Starting in late 2007, faced with acute financial market distress, the Federal Reserve created programs to keep credit flowing to households and businesses. The loans extended under those programs helped stabilize the financial system.”
― Janet Yellen
“In 2006, the Congress had approved plans to allow the Fed, beginning in 2011, to pay interest on banks’ reserve balances. In the fall of 2008, the Congress moved up the effective date of this authority to October 2008.”
― Janet Yellen
“Paying interest on reserve balances enables the Fed to break the strong link between the quantity of reserves and the level of the federal funds rate and, in turn, allows the Federal Reserve to control short-term interest rates when reserves are plentiful.”
― Janet Yellen
“A higher IOER rate encourages banks to raise the interest rates they charge, putting upward pressure on market interest rates regardless of the level of reserves in the banking sector. While adjusting the IOER rate is an effective way to move market interest rates when reserves are plentiful, federal funds have generally traded below this rate.”
― Janet Yellen
“An increase in shareholder value can arise for reasons other than greater efficiency, such as increased power and the resulting ability to increase profits by raising prices.”
― Janet Yellen
“It is hard to have great confidence in predicting what market reactions to Fed decisions will be.”
― Janet Yellen
“When the time comes to raise rates, I do think there will be some benefits that flow through to savers.”
― Janet Yellen
“Policies to strengthen education and training, to encourage entrepreneurship and innovation, and to promote capital investment, both public and private, could all potentially be of great benefit in improving future living standards in our nation.”
― Janet Yellen
“As a general principle, the American people would be well served by the active pursuit of effective policies to support longer-run growth in productivity.”
― Janet Yellen
“It’s extremely important for our banks to have more capital, higher quality capital.”
― Janet Yellen
“Our objective in regulation should be to put in place tough enough regulation and capital and liquidity standards that we level the playing field and make it costly.”
― Janet Yellen
“It’s important for the Fed, hard as it is, to attempt to detect asset bubbles while they’re forming.”
― Janet Yellen
“We need to keep in mind the well-established fact that the full effects of monetary policy are felt only after long lags. This means that policy makers cannot wait until they have achieved their objectives to begin adjusting policy.”
― Janet Yellen
“I would be uncomfortable raising the federal funds rate if readings on wage growth, core consumer prices, and other indicators of underlying inflation pressures were to weaken, if market-based measures of inflation compensation were to fall appreciably further, or if survey-based measures were to begin to decline noticeably.”
― Janet Yellen
“Maturity transformation is a central part of the economic function of banks and many other types of financial intermediaries.”
― Janet Yellen
“The extent of and continuing increase in inequality in the United States greatly concern me.”
― Janet Yellen
“The financial crisis and the Great Recession demonstrated, in a dramatic and unmistakable manner, how extraordinarily vulnerable are the large share of American families with very few assets to fall back on. We have come far from the worst moments of the crisis, and the economy continues to improve.”
― Janet Yellen
“Are deviations from full employment a social problem? Obviously.”
― Janet Yellen
“The pace of increases in labor compensation provides another possible indicator, albeit an imperfect one, of the degree of labor market slack.”
― Janet Yellen
“Household spending growth has been particularly solid in 2015, with purchases of new motor vehicles especially strong. Job growth has bolstered household income, and lower energy prices have left consumers with more to spend on other goods and services.”
― Janet Yellen
“Because food and energy prices are volatile, it is often helpful to look at inflation excluding those two categories – known as core inflation – which is typically a better indicator of future overall inflation than recent readings of headline inflation.”
― Janet Yellen
“A pickup in demand in many advanced economies and a stabilization in commodity prices should, in turn, boost the growth prospects of emerging market economies.”
― Janet Yellen
“Yankee Stadium is a natural venue for another lesson: You won’t succeed all the time. Even Ruth, Gehrig, and DiMaggio failed most of time when they stepped to the plate. Finding the right path in life, more often than not, involves some missteps.”
― Janet Yellen
“Beyond monetary policy, fiscal policy has traditionally played an important role in dealing with severe economic downturns.”
― Janet Yellen
“A wide range of possible fiscal policy tools and approaches could enhance the cyclical stability of the economy. For example, steps could be taken to increase the effectiveness of the automatic stabilizers, and some economists have proposed that greater fiscal support could be usefully provided to state and local governments during recessions.”
― Janet Yellen
“During the 1970s, inflation expectations rose markedly because the Federal Reserve allowed actual inflation to ratchet up persistently in response to economic disruptions – a development that made it more difficult to stabilize both inflation and employment.”
― Janet Yellen
“Financial market participants appear to recognize the FOMC’s data-dependent approach because incoming data surprises typically induce changes in market expectations about the likely future path of policy, resulting in movements in bond yields that act to buffer the economy from shocks.”
― Janet Yellen
“The outlook for the economy, as always, is highly uncertain.”
― Janet Yellen
“It seems to me that women have made an awful lot of progress, but they probably remain underrepresented at the highest levels of most organizations, for a variety of reasons. And it’s probably going to take a long time to change that.”
― Janet Yellen
“To me, the greatest asset of the Fed is the people. We have a tremendously dedicated staff… They feel proud to work for the Fed because this is such a competent, professional and well-respected organization.”
― Janet Yellen
“I will be the first to say that it is always difficult to get monetary policy just right. But the Fed’s analytical prowess is top-notch, and our forecasting record is second to none.”
― Janet Yellen
“American workers have faced serious difficulties in the labor market since the first oil shock in 1973. Since that time, the pace of productivity advance has slowed for reasons which are still not understood, lowering the rate at which living standards have advanced.”
― Janet Yellen
“The Federal Reserve’s monetary policy objective is to foster maximum employment and price stability. In this regard, a key challenge is to assess just how far the economy now stands from the attainment of its maximum employment goal.”
― Janet Yellen
“Private sector labor market flows provide additional indications of the strength of the labor market. For example, the quits rate has tended to be pro-cyclical, since more workers voluntarily quit their jobs when they are more confident about their ability to find new ones and when firms are competing more actively for new hires.”
― Janet Yellen
“A U.K. vote to exit the European Union could have significant economic repercussions.”
― Janet Yellen
“The Fed should not be responding to the ups and downs of the markets, and it is certainly not our policy to do so. But when there are significant financial developments, it’s incumbent on us to ask ourselves what is causing them.”
― Janet Yellen
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