Home Economy Yellen says Fed’s efforts shifting from acceleration to cruise control

Yellen says Fed’s efforts shifting from acceleration to cruise control

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         Yellen says Fed’s efforts shifting from acceleration to cruise control

ANN ARBOR, Mich. — Federal Reserve Chairwoman Janet Yellen indicated Monday that the era of extremely stimulative monetary policy was coming to an end.

In a public discussion at the University of Michigan, Yellen said the Fed was moving away from its efforts to revive a recession-scarred economy and focusing instead on maintaining the gains of the past few years. That will change the central bank’s policy-making stance, she said, noting that Fed officials plan to continue gradually raising interest rates unless the economy begins to deteriorate.

Read: Live blog recap of Janet Yellen’s conversation at the University of Michigan

“Where before we had our foot pressed down on the gas pedal trying to give the economy all the oomph we possibly could, now [we’re] allowing the economy to kind of coast and remain on an even keel,” she said. “To give it some gas, but not so much that we’re pressing down hard on the accelerator.”

That means the Fed’s benchmark short-term interest rate will continue to move up to its long-term average, she said.

An expanded version of this report appears on WSJ.com.

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