Janet Yellen, Chair of Federal Reserve says economy is just about on right track

Federal Reserve Chair Janet Yellen answers a reporter's question at a news conference on Wednesday, Dec. 15, 2016. [Federal Reserve]

Janet Yellen, the Chair of the Federal Reserve, the nation's central bank, spoke to the Commonwealth Club Wednesday  in San Francisco.

 Appointed by President Obama three years ago, Yellen has another year on her term and says she intends to stay. Nonetheless, President-elect Trump has already criticized her for keeping interest rates too low for too long. Though she didn't mention Mr. Trump by name, she made no apologies, proclaiming that the economy is just about on the right track for continued growth. "We think it's close. The economy has come a long way since the financial crisis," said Ms. Yellen.

Keeping interest rates at near zero, improved the economy. Recent increases have been made to keep it from over heating. The trick now is to find balance: keep the economy strong by raising rates without raising them too much which would chill the economy. "We're expecting to increase our Federal Funds Rate target a few times a year, until, by the end of 2019, it is close to our estimate of its longer run neutral rate of 3%," said Fed Chair Yellen.

She does not expect the economy to grow much more than 2% a year, far less that what the President-elect said he'll produce. The only mention of the President-elect, came when the Dean of UC Berkeley's Dean of Journalism asked her about interactions with Presidential administrations. Since the Fed is an independent agency, Mr. Trump is not her boss, suggesting they will have little direct interaction. "A very long tradition, dating back many decades, is that the Fed Chair and the Secretary of the Treasury regularly meet and discuss the economy and a range of issues where we have common responsibility," said Yellen.

At the moment, at least, Ms, Yellen believes the economy is doing well, growing slowly and likely to continue to create jobs. She cautions, however, major changes in economic policy, something Presidents and Congress have a lot to say about, could change her assessment very quickly.