Federal Reserve Board Chair Janet Yellen told the Senate Banking Committee that highly accommodative monetary policy "remains appropriate."
The Federal Open Market Committee "judge[s] that a high degree of monetary policy accommodation remains appropriate. Consistent with that assessment, we have maintained the target range for the federal funds rate at 0 to 1/4 percent and have continued to rely on large-scale asset purchases and forward guidance about the future path of the federal funds rate to provide the appropriate level of support for the economy," she said, according to prepared text released by the Fed.
The labor market still has "significant slack," with participation lower than expected, and slow growth in hourly compensation.
"Although the economy continues to improve, the recovery is not yet complete," she said.
She wrote off the drop in first quarter real gross domestic product, as being the result of "transitory factors," and noted that recent economic indicators suggest second quarter figures will be improved, "but this bears close watching," she said.
