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    China, EU Economic Challenges May Impact US - Federal Reserve Chair

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    According to Federal Reserve Chair Janet Yellen, foreign economies, particularly China and the European Union, face a number of challenges that could restrain economic activity and affect the United States.

    WASHINGTON (Sputnik) Foreign economies, particularly China and the European Union, face a number of challenges that could restrain economic activity and affect the United States, Federal Reserve Chair Janet Yellen said at a Federal Open Market Committee testimony on Tuesday.

    “Foreign economic developments can pose risk to the US economic outlook,” Yellen said. “In China, economic growth could slow more than anticipated, as policy makers address financial vulnerabilities and manage the desired transition to less reliant on exports and investment as sources of growth. In the Euro area, recovery remains slow.”

    The International Monetary Fund (IMF) recently published its global growth projections, and lowered projected global growth rates in the next two years by a third of a percentage point, according to recent statements by IMF Chief Economist Olivier Blanchard. Only the United States showed promise of notable growth, the IMF said.

    The Federal Reserve is the central bank of the United States that is responsible for national monetary policy, setting interest rates and regulating banks.

    The US Federal Reserve payments to the US Treasury will decrease but will continue to be positive, Federal Reserve Chair Janet Yellen said at a Federal Open Market Committee testimony on Tuesday.

    “It is likely that our remittances to the US Treasury will decline,” Yellen said. “Nevertheless, we expect the remittances to remain positive.”

    The Federal Reserve uses its income to cover operating expenses, but US law requires it to send the rest to the US Treasury’s general fund. The payments, or remittances, are used to pay government bills and benefits.

    “We have had record transfers to the US Treasury, close to $100 billion this past year and $500 billion since 2009,” Yellen said.

    However, the situation is likely to reverse if the United States gets into monetary policy normalization as the US economy improves, according to Yellen.

    The Federal Reserve is the central bank of the United States that is responsible for national monetary policy, setting interest rates and regulating banks.

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