Fed Chair Yellen in Q&A said the corporate tax rate is an important issue
Fed Chair Yellen in Q&A said the corporate tax rate is an important issue for Congress, but didn't weigh in much further. On regulations, she did say the Fed is trying to tailor the rules, and it's appropriate to look into easing some regulations on small banks. Stress testing is an important tool of the Fed. She didn't think the Volcker Rule shouldn't apply to smaller banks. On the 4.0% unemployment rate, it's "desirable" that it has declined recently, but there are disparities across groups, which the Fed doesn't have tools to address (Powell also indicated that yesterday in his confirmation hearing). On the upcoming FOMC meeting, she of course didn't really answer what might happen between now and the December 13 policy statement, that could impact the Fed's decision. She did reiterate that policy remains accommodative, but it's important to remain on a gradual path toward a neutral rate. Also, upward pressure on wages has been moderate, she acknowledged, and that may suggest that neither the economy nor the labor market are significantly overheated (again as mentioned by Powell). She attributed some of the softness in wages to weak productivity growth, though the latter is not well understood.