Yellen, speaking with the Senate Banking Committee, said that’s because productivity growth is very difficult to move.
“In the last five years, productivity growth has averaged a half percent. The last decade, something like 1.1 percent,” Yellen said, adding that labor force growth is also on the decline, which would pose a challenge.
In order for the administration to hit its goal, productivity growth would need to rise to “something over 2,” she said.
Mick Mulvaney wrote in a Wall Street Journal op-ed that the U.S. can achieve 3 percent GDP by cutting taxes, reforming welfare programs, investing in infrastructure, initiating new trade deals and curbing government spending, among other things.
Still, Trump’s policy overhauls could have a positive impact on the economy if done properly, Yellen said. “I hope that Congress and the administration will focus on changes that will succeed in accomplishing that.”
Source: Investment Cnbc
Fed's Yellen doesn't believe Trump's 'MAGAnomics' will be enough to get economic growth to 3%