Posted by Leonard Steinberg on november 14th, 2013

Janet Yellen, the President’s nominee to lead the U.S. Federal Reserve, will defend today the central bank’s aggressive monetary easing before a Senate panel that includes many tough Republican critics who believe the volume of money-printing to be excessive. Yellen is likely to remain vague on future Fed actions.

“I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy,” Yellen, the Fed’s current vice chair, will tell the panel today at 10am, according to prepared remarks released late last night. The Fed has maintained a controversial bond buying program, while holding interest rates near zero, and Yellen’s remarks bolstered views she would preserve policy continuity with Bernanke. It appears the central bank will push on with its bond-buying stimulus into 2014 and move cautiously when it seeks to temper its support for the economy. This should bode well for maintaining low interest rates…..a good thing for the real estate markets.

Unemployment is still hovering around 7.3%. There certainly is a tale of ‘two economies’ out there: many very wealthy people’s balance sheets have soared over the past few years of cheap money while the majority of Americans have not fared as well. Cheap money with growing efficiencies in technology have made companies much more profitable, but of course this is happening at the expense of jobs. Construction is proving to be one of the largest jobs growth areas and anything that keeps real estate and construction strong can only help the jobs market too.

We shall see….