U.S. Federal Reserve Chair Janet Yellen said U.S. labor markets are far from healthy and signaled the Fed will keep monetary policy loose until hiring and wage data show the effects of the financial crisis are “completely gone.”

    Despite strong recent jobs reports and other signs of continuing recovery, Yellen emphasized in testimony to the Senate Banking Committee that she won’t conclude the economy has recovered until wages start rising and discouraged workers return to the labor force.

    In its latest semiannual report to Congress, the Fed did cite unease about some aspects of U.S. securities markets, taking the unusual step of singling out biotechnology and social media stocks for their “stretched” valuations.

    The observation hit biotech stocks with some of their biggest losses in months, while social media companies like Yelp slid as much as 4 percent.

    But Yellen’s overall testimony and an accompanying written report to Congress said asset values were in line with “historic norms,” and that the economy would continue to grow if supported by the Fed’s current low interest rates.

    Yellen said the one thing that might prompt the central bank to raise rates earlier or faster is if hiring and wages take off in an unexpected way. So far, there is little evidence that is happening in a country with still high unemployment, and labor force participation at its lowest level in a quarter century.

    “While we are making progress in the labor market we have not achieved our goal,” Yellen told the committee. “There have been substantial headwinds holding the recovery back.” (SD-Agencies)