Federal Reserve Chair Janet Yellen spoke about US policies and economic outlook in Washington on Wednesday.Markets were watching closely for her statements about interest rates, which she predicted would rise but remain low relative to historic levels.Prompted by lawmakers, she also spoke on a range of topics, including inequality and the national debt.Here were six other takeaways from her appearance at the House Financial Services committee:1. She’s worried inequality makes Americans think the system is riggedLawmakers pressed Ms Yellen on inequality, pointing to disparities among African Americans, as well as declines in older industrial cities. She didn’t offer policy solutions but said she shares their worries.”I am very concerned about inequality in income and wealth,” she said. “I think Americans need to feel our economic system is one where rewards come to those who work hard and play by the rules and where some groups do disproportionately well and others seem to be lagging behind, as has been the case. There’s the sense of it being a very unfair system.”2. Ms Yellen wants to keep the Federal Reserve out of politics – but politics are at her doorDuring the hearing lawmakers voiced support for recent proposals that would give Congress more power over the Federal Reserve, through funding and other reviews. Ms Yellen also faced criticism from Missouri Republican Ann Wagner over Fed leaks of information that appear to benefit insiders.Ms Wagner pointed to a private speech by Fed Vice Chair Stanley Fischer at the Brookings Institution, a Washington think-tank. The president of the Federal Reserve Bank of Richmond also resigned earlier this year, after admitting he had shared confidential information with an economic advisory firm. 3. Current policies for spending and taxation put America on an unsustainable borrowing pathAmerica’s national debt is approaching $19.9tr – a key concern for some Republicans, who have repeatedly proposed capping how much debt the country can incur. (The dispute led to the 2013 government shutdown.)
Ms Yellen said she shares concerns about national debt – but that fixing the problem lies with Congress.”I agree that what you’re showing here represents a trend that, given current spending and taxation decisions, is going to lead to an unsustainable debt situation with rising interest rates and declining investment in the United States that will further harm productivity growth and living standards,” she said. “A key thing that Congress should be taking into account … is the need to achieve sustainability in this debt path over time.”4. She’s not worried about the rising share of people outside the labour marketIn 1997, about 67% of the over-16 population was working or looking for work. That number has fallen to less than 63% today, raising concerns.Ms Yellen said she thinks it is largely because the population is getting older.”To my mind, the major factor here is an aging population that is putting downward pressure on labour force participation,” she said.5. Lighter regulation for smaller banks is likely on its wayCongress and the White House are looking at ways to overhaul financial rules, spawning a partisan fight about how much regulation is needed to have a growing economy and avoid major meltdowns.Despite the divide, there’s consensus between Republicans and Democrats about the need to change rules for smaller so-called community banks. In answering questions about regulatory proposals, Ms Yellen joined that chorus.”I am very supportive of trying to reduce the burden on community banks,” she said.6. Ms Yellen may be on her way outMs Yellen’s term as Federal Reserve chair ends in February. As some lawmakers praised and thanked her for her leadership, she said staying on has not come up in conversations with Mr Trump.Gary Cohn, a former Goldman Sachs leader who now heads Mr Trump’s National Economic Council, is leading the search for a new chair and is reportedly one of the lead candidates in the running.