On Tuesday, Federal Reserve Chair Janet Yellen still expects that U.S. inflation will improve but added a stipulation that she is “very uncertain” and is it is possible that prices could remain low for many years. Yellen said the Fed has almost reached its goals but must continue to slowly raise interest keeping inflation and unemployment rates from falling too low.

Yellen, retiring from the U.S. central bank in February, is a powerful figure among world finance. Yellen doubts that inflation expectations have decreased that greatly despite the five years of below-target U.S. price readings. She believes that inflation should rebound over the next year or two, adding: “I will say I am very uncertain about this. My colleagues and I are not certain that it is transitory, and we are monitoring inflation very closely”.

The Fed’s policymakers are certain that inflation would rebound even with the preferred price measure dropping below the 2 percent target to 1.3 percent. Unemployment dropped to 4.1 percent and economic growth is at a healthy 3 percent which gives the expectation of the rate increase next month.

Yellen, the first woman to lead the Fed, stated during her term a main takeaway was keeping an open mind and not assuming “you have a monopoly on truth,” Yellen said at NYU Stern School of Business. “It may be that there is something more endemic going on or long-lasting here that we need to pay attention to”. Yellen added that not increasingly not reaching the target of inflation “can be quite dangerous,” and that the Fed must avoid pushing unemployment “way below” sustainable levels. “We don’t want a boom-bust policy,” she said.

Yellen is credited with strengthening the economy and directing monetary policy away from what followed the 2007-2009 recession and financial crisis. Yet tradition has been broken and President Donald Trump nominated Jerome Powell, a Fed governor, to become Fed chair in February. Yellen stated on Monday that she would resign her seat on the Fed’s Board of Governors when Powell is sworn in.


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