Fed Chair Yellen: Economy on track for solid growth this quarter

Washington (May 7)  The economy is on track for solid growth this quarter after recent weakness that was mostly weather-related, Fed chair Janet Yellen said in prepared remarks on Wednesday.

Many recent indicators suggest a rebound in spending and production, Yellen said in remarks for a joint Congressional committee.

Economists now broadly expect the economy to have contracted in the first quarter, though they also project a strong snapback in the current quarter.

At the same time, Yellen cautioned that housing activity has remained disappointing and that the labor market is still far from satisfactory.

A "high degree of monetary accommodation remains warranted," Yellen said, adding that current interest rate targets would remain low for a "considerable time."

All stock indices sell off in reaction to Yellen's observations about the US economy.