“When Federal Reserve Chairwoman Janet Yellen presented her semiannual testimony to Congress in February the jobless rate was 6.7% and annual inflation was 1.2%. When she returns for two days of testimony Tuesday and Wednesday, she will have a 6.1% jobless rate and 1.8% inflation to report to lawmakers. What matters most in her testimony will be how she explains these developments, particularly the job market’s improvement…
“[It] poses Ms. Yellen with a challenge. The jobless rate is falling much faster than officials expected… Ms. Yellen has said the Fed’s plans for interest rates depend on how fast the economy converges on its goals of maximum employment and 2% inflation. A slow path to those goals implies a long delay before the Fed’s benchmark short-term rate rises from near zero and a fast path to those goals implies a quicker takeoff
