Fed Chair Yellen: Tax Cut Expectations Drove Growth, Unemployment Forecast at 3.9%

Federal Reserve Chair Janet Yellen prepares to speak before a Senate Banking, Housing, and Urban Affairs Committee hearing on the ìSemiannual Monetary Policy Report to the Congressî on Capitol Hill in Washington, U.S., February 14, 2017. (Photo: Reuters)

Federal Reserve Chair Janet Yellen said Wednesday expectations for tax cuts have fueled “significant” market gains, in turn leading to higher economic growth. The Federal Open Market Committee (FOMC) voted 7 to 2 to raise its federal funds target by 25 basis points, to a 1.25 to 1.50 percent range.

She said FOMC members “welcome” tax cuts, which they see already boosting both consumer and capital spending. FOMC projections call for lower unemployment in 2018 and stronger gross domestic product (GDP). The Fed now forecasts unemployment to fall to 3.9% in 2018, down from 4.1%.