Today, Federal Reserve Chair Janet Yellen addressed the Senate Banking Committee in her semi-annual monetary policy report. Overall, Yellen believes the economic recovery process is not yet complete, as the job market remains shaky and wages are not increasing more steadily.
In regards to the labor market, Yellen said,
Labor force participation appears weaker than one would expect based on the aging of the population and the level of unemployment. These and other indications that significant slack remains in labor markets are corroborated by the continued slow pace of growth in most measures of hourly compensation."
She went on to make her point abundantly clear: "Too many Americans remain unemployed." Yellen also took aim at the housing market, which she called weak, and mentioned that business investment was less than expected.
Yellen said that while there are early signs of an inflation increase, the Federal Reserve is not pushing up their plan for raising interest rates. This change is still scheduled for the middle of next year. She did note this could change, "with interest rates rising sooner and faster, if data show labor markets improving more quickly than expected."
She also warned about the biotechnology and social media fields. Their stocks were particularly shaky after the policy report came out in full. In Yellen's report, she writes,
Valuation metrics in some sectors do appear substantially stretched—particularly those for smaller firms in the social media and biotechnology industries, despite a notable downturn in equity prices for such firms early in the year."
Yelp stock was hit hard by this report, down 3.43 percent to 68.67:
You can read her full report here.
This article is from the archive of our partner The Wire.