Monetary Policy

Fed’s Yellen Warns of ‘Negative Feedback Loop’ 

A Fed official said yesterday that housing woes are a weight on the U.S. economy that has yet to be resolved, and warned that the Fed may have to contend with a situation where downward market forces feed off of one another. Saying “growth risks are skewed to the downside for the near term,” Janet Yellen, president of the Federal Reserve Bank of San Francisco, suggested that the Federal Reserve may need to take further action to prevent “a negative feedback loop” from gripping the economy.