The Trump administration's goal to shortly achieve 3 percent GDP would be "challenging," Federal Reserve Chair Janet Yellen warned Congress on Thursday.
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.
Yellen spoke after President Donald Trump's Office of Management and Budget director, Mick Mulvaney, revealed the administration's plan to achieve sustained growth, which he dubbed "MAGAnomics."
Mulvaney wrote in a Wall Street Journal op-ed Thursday 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."
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