Federal Reserve Chair Janet Yellen and her colleagues have
lowered their sights on how fast the economy needs to expand to meet their goal
of cutting unemployment.
No longer are they saying growth must accelerate from the 2
percent to 2.5 percent pace it has generally averaged since the recession
ended. Instead, they are stressing the importance of preventing the expansion
from faltering.
Exhibit number one: the Fed chief herself. Yellen said on
April 16 that a key question facing the central bank is what “may be pushing
the recovery off track.” Contrast that with her comments on March 4, 2013, of
the importance of seeing “a convincing pickup in growth.”
The central bank on April 30 pushed ahead with its plan to
gradually wind down its asset-purchase program in spite of news earlier in the
day that growth ground to a virtual halt in the first quarter. Saying the
economy is rebounding, the Federal Open Market Committee voted unanimously to
reduce its bond purchases by another $10 billion a month, to $45 billion.
Most FOMC participants forecast gross domestic product
growth of 2.8 percent to 3 percent this year and 3 percent to 3.2 percent in
2015, according to projections released March 19.
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