Hard to tell how much weather played a role in recent economic weakness: Fed Chair Yellen

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Federal Reserve Chair Janet Yellen said Thursday that harsh winter weather may have had an impact on recent economic data and reiterated her stance that accomodative monetary policy should remain appropriate for some time.

(Read moreThe Fed is ‘out of touch’: Polcari)

Getty Images Federal Reserve Board Chairman Janet Yellen gestures as she testifies during a Senate Banking, Housing and Urban Affairs Committee hearing while delivering the Federal Reserves semiannual Monetary Policy Report on Capitol Hill, February 27, 2014 in Washington.

Getty Images
Federal Reserve Board Chairman Janet Yellen gestures as she testifies during a Senate Banking, Housing and Urban Affairs Committee hearing while delivering the Federal Reserves semiannual Monetary Policy Report on Capitol Hill, February 27, 2014 in Washington.

“Since my appearance before the House committee, a number of data releases have pointed to softer spending than many analysts had expected,” Yellen told the Senate Banking Committee. “Part of that softness may reflect adverse weather conditions, but at this point it is difficult to discern how much.”

Stocks remained little changed amid the testimony. Treasury prices were also steady.

Yellen said the tight fiscal policy has posed a drag on the U.S. economy, also weighing on monetary policy.

“The drag is likely to lessen substantially during the current year, but nevertheless there remains some drag,” she said. “Of course it is true that because there has been fiscal policy drag the burden on monetary policy has been larger.”

While the Fed Chair doesn’t necessarily see “broad bubble concerns,” she flagged a few areas the central bank is monitoring.

“For example, underwriting standards in leveraged lending clearly appeared to be deteriorating. We have addressed that with supervisory guidance and special exams…We have regulatory and supervisory tools.”

Yellen’s previously scheduled appearance before the committee two weeks ago was postponed due to the snowstorm.

The Fed currently purchases $65 billion in Treasurys and mortgage-backed securities every month as part of its long-running stimulus measures, down from the program’s original $85-billion-a-month amount. The FOMC is scheduled to meet on March 18 and 19.

(Read more‘Hurdle pretty high’ on tapering: Fed’s Williams)

—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

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