“FOMC [Federal Open Market Committee] participants project inflation to be quite low this year, largely reflecting lower energy and import prices,” Yellen said on Wednesday.
“The central tendency of the inflation projections for this year is now below 1 percent,” she added.
The Consumer Price Index, one gauge used to measure inflation, rose 0.8 percent in 2014, below the 2.1 percent average over the past ten years, according to the US Bureau of Labor and Statistics data.
US export growth has weakened partially because of the strength of the US dollar, Yellen added.
“We [Federal Open Market Committee] noted that export growth is weakened. Probably, the strong dollar is one reason for that,” She said Wednesday.
World markets show that the US dollar has jumped 24 percent against major currencies since summer, hitting a 12-year high against the euro on Monday.
The Federal Reserve Chair noted that a strong dollar is also holding down US import prices and pushes the inflation down.
Yellen also said that increasing control of the US Congress over the Federal Reserve is not needed because the United States’ central bank is already one of the world’s most transparent central banks.
“I do not think the [Federal Reserve] system is broken, I think it is working well. I do not see a need for changes, but of course it is up to Congress to review that,” Yellen said on Wednesday.
Yellen explained that congressional changes under consideration would politicize US monetary policy, and reminded that back in 1978 US Congress judged such policy would lead to poor economic performance.
“I believe the Federal Reserve is already one of the most transparent central banks of any around the globe, we provide an immense amount of information both financial about our balance sheet and our monetary policy operations,” Yellen said.
The US Federal Reserve, also referred to as the Fed, is the central bank of the United States. The Fed is responsible for guiding the nation’s monetary policy, setting interest rates and regulating banks.
