No. 2 Fed official praises new Fed openness

WASHINGTON (AP) — The No. 2 official at the Federal Reserve says she hopes the old days of extreme secrecy surrounding the Federal Reserve are gone forever.

Janet Yellen, vice chair of the Fed, says that the Fed’s old policy of not even telling financial markets when it had changed a key interest rate has been replaced by one of using communications to enhance interest-rate policies.

The Fed in December for the first time linked changes in a key short-term rate to a drop in unemployment below 6.5 percent, as long as inflation remains modest. The Fed is also buying $85 billion per month in bonds to keep downward pressure on long-term rates.

Yellen says she expects both policies to remain in effect because unemployment remains high.

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