Yellen Promises To Continue ‘Stimulus’ for Indefinite Future [Full Press Conference]

Yellen Good afternoon The ░░░░░░░░ Open Market Committee concluded ░░░░░░░░ meeting earlier today and ░░░░░░░░ usual released its monetary ░░░░░░░░ statement The Committee also ░░░░░░░░ a document describing the ░░░░░░░░ the Committee intends to ░░░░░░░░ when at some point ░░░░░░░░ the future it becomes ░░░░░░░░ to begin normalizing the ░░░░░░░░ of policy Let me ░░░░░░░░ that our release of ░░░░░░░░ information is not meant ░░░░░░░░ convey any change in ░░░░░░░░ stance of policy As ░░░░░░░░ know the FOMC s ░░░░░░░░ on policy are conveyed ░░░░░░░░ the policy statement which ░░░░░░░░ will now discuss before ░░░░░░░░ back to our normalization ░░░░░░░░ As indicated in our ░░░░░░░░ statement the FOMC decided ░░░░░░░░ make another reduction in ░░░░░░░░ pace of its asset ░░░░░░░░ The Committee also maintained ░░░░░░░░ forward guidance regarding the ░░░░░░░░ funds rate target and ░░░░░░░░ its view that a ░░░░░░░░ accommodative stance of monetary ░░░░░░░░ remains appropriate Let me ░░░░░░░░ the economic conditions that ░░░░░░░░ these actions The economy ░░░░░░░░ continuing to make progress ░░░░░░░░ the FOMC s objective ░░░░░░░░ maximum sustainable employment In ░░░░░░░░ labor market conditions have ░░░░░░░░ further in recent months ░░░░░░░░ the pace of job ░░░░░░░░ has slowed some recently ░░░░░░░░ gains have averaged more ░░░░░░░░ 200 000 per month ░░░░░░░░ the past three months ░░░░░░░░ unemployment rate was 6 ░░░░░░░░ percent in August two ░░░░░░░░ lower than the data ░░░░░░░░ at the time of ░░░░░░░░ June FOMC meeting Broader ░░░░░░░░ of labor market utilization ░░░░░░░░ as the U 6 ░░░░░░░░ have shown similar improvement ░░░░░░░░ the labor force participation ░░░░░░░░ has flattened out These ░░░░░░░░ continue the trend of ░░░░░░░░ progress toward our employment ░░░░░░░░ But the labor market ░░░░░░░░ yet to fully recover ░░░░░░░░ are still too many ░░░░░░░░ who want jobs but ░░░░░░░░ find them too many ░░░░░░░░ are working part time ░░░░░░░░ would prefer full time ░░░░░░░░ and too many who ░░░░░░░░ not searching for a ░░░░░░░░ but would be if ░░░░░░░░ labor market were stronger ░░░░░░░░ noted in the FOMC ░░░░░░░░ a range of labor ░░░░░░░░ indicators suggests that there ░░░░░░░░ significant underutilization of labor ░░░░░░░░ The Committee continues to ░░░░░░░░ sufficient underlying strength in ░░░░░░░░ economy to support ongoing ░░░░░░░░ in the labor market ░░░░░░░░ real GDP rose at ░░░░░░░░ annual rate of only ░░░░░░░░ 1 percent in the ░░░░░░░░ half of the year ░░░░░░░░ modest gain reflected in ░░░░░░░░ transitory factors including a ░░░░░░░░ in net exports Indeed ░░░░░░░░ domestic final demand that ░░░░░░░░ spending by domestic households ░░░░░░░░ businesses grew about twice ░░░░░░░░ fast as GDP Indicators ░░░░░░░░ spending and production for ░░░░░░░░ third quarter suggest that ░░░░░░░░ activity is expanding at ░░░░░░░░ moderate pace and the ░░░░░░░░ continues to expect a ░░░░░░░░ pace of growth going ░░░░░░░░ Inflation has been running ░░░░░░░░ the Committee s 2 ░░░░░░░░ objective but with longer ░░░░░░░░ inflation expectations appearing to ░░░░░░░░ well anchored and the ░░░░░░░░ recovery continuing the Committee ░░░░░░░░ inflation to move gradually ░░░░░░░░ toward its objective Moreover ░░░░░░░░ has firmed some since ░░░░░░░░ in the year and ░░░░░░░░ Committee believes that the ░░░░░░░░ of inflation running persistently ░░░░░░░░ 2 percent has diminished ░░░░░░░░ is always the case ░░░░░░░░ Committee will continue to ░░░░░░░░ incoming data carefully to ░░░░░░░░ that policy is consistent ░░░░░░░░ attaining the FOMC s ░░░░░░░░ run goals of maximum ░░░░░░░░ and inflation of 2 ░░░░░░░░ This outlook is reflected ░░░░░░░░ the individual economic projections ░░░░░░░░ in conjunction with this ░░░░░░░░ by the FOMC participants ░░░░░░░░ for the first time ░░░░░░░░ through 2017 As always ░░░░░░░░ participant s projections are ░░░░░░░░ on his or her ░░░░░░░░ view of appropriate monetary ░░░░░░░░ The central tendency of ░░░░░░░░ unemployment rate projections is ░░░░░░░░ lower than in the ░░░░░░░░ projections and now stands ░░░░░░░░ 5 9 to 6 ░░░░░░░░ percent at the end ░░░░░░░░ this year Committee participants ░░░░░░░░ see the unemployment rate ░░░░░░░░ to its longer run ░░░░░░░░ level over the course ░░░░░░░░ 2016 and edging a ░░░░░░░░ below that level in ░░░░░░░░ The central tendency of ░░░░░░░░ projections for real GDP ░░░░░░░░ is 2 0 to ░░░░░░░░ 2 percent for 2014 ░░░░░░░░ slightly from the June ░░░░░░░░ Over the next three ░░░░░░░░ the projections for real ░░░░░░░░ growth run somewhat above ░░░░░░░░ estimates of longer run ░░░░░░░░ growth Finally FOMC participants ░░░░░░░░ to see inflation moving ░░░░░░░░ back toward 2 percent ░░░░░░░░ central tendency of the ░░░░░░░░ projections is 1 5 ░░░░░░░░ 1 7 percent in ░░░░░░░░ rising to 1 9 ░░░░░░░░ 2 0 percent in ░░░░░░░░ As I noted earlier ░░░░░░░░ Committee decided today to ░░░░░░░░ another reduction in the ░░░░░░░░ of asset purchases Two ░░░░░░░░ ago when the FOMC ░░░░░░░░ this purchase program the ░░░░░░░░ rate stood at 8 ░░░░░░░░ percent and progress in ░░░░░░░░ it was expected to ░░░░░░░░ much slower than desired ░░░░░░░░ additional policy accommodation The ░░░░░░░░ of the program was ░░░░░░░░ achieve a substantial improvement ░░░░░░░░ the outlook for the ░░░░░░░░ market and to ensure ░░░░░░░░ inflation was moving back ░░░░░░░░ the Committee s longer ░░░░░░░░ goal of 2 percent ░░░░░░░░ light of the cumulative ░░░░░░░░ toward maximum employment and ░░░░░░░░ improvement in the outlook ░░░░░░░░ labor market conditions since ░░░░░░░░ inception of the program ░░░░░░░░ with the likelihood of ░░░░░░░░ running persistently below 2 ░░░░░░░░ having diminished somewhat we ░░░░░░░░ reduced our pace of ░░░░░░░░ purchases again at this ░░░░░░░░ Starting next month we ░░░░░░░░ be purchasing 15 billion ░░░░░░░░ securities per month down ░░░░░░░░ billion per month from ░░░░░░░░ current rate If incoming ░░░░░░░░ broadly supports the Committee ░░░░░░░░ expectation of ongoing improvement ░░░░░░░░ the labor market and ░░░░░░░░ moving back over time ░░░░░░░░ its longer run objective ░░░░░░░░ Committee will end this ░░░░░░░░ at our next meeting ░░░░░░░░ Committee will continue its ░░░░░░░░ of reinvesting proceeds from ░░░░░░░░ Treasury securities and principal ░░░░░░░░ from holdings of agency ░░░░░░░░ and MBS The Committee ░░░░░░░░ sizable holdings of longer ░░░░░░░░ securities should help maintain ░░░░░░░░ financial conditions and promote ░░░░░░░░ progress toward our objectives ░░░░░░░░ maximum employment and inflation ░░░░░░░░ 2 percent Regarding interest ░░░░░░░░ the Committee reaffirmed its ░░░░░░░░ guidance that it likely ░░░░░░░░ be appropriate to maintain ░░░░░░░░ current target range for ░░░░░░░░ federal funds rate for ░░░░░░░░ considerable time after the ░░░░░░░░ purchase program ends especially ░░░░░░░░ projected inflation continues to ░░░░░░░░ below the Committee s ░░░░░░░░ percent longer run goal ░░░░░░░░ longer term inflation expectations ░░░░░░░░ well anchored This judgment ░░░░░░░░ based on the Committee ░░░░░░░░ assessment of realized and ░░░░░░░░ progress toward its objectives ░░░░░░░░ maximum employment and 2 ░░░░░░░░ inflation an assessment that ░░░░░░░░ based on a wide ░░░░░░░░ of information including measures ░░░░░░░░ labor market conditions indicators ░░░░░░░░ inflation pressures and inflation ░░░░░░░░ and readings on financial ░░░░░░░░ Further once we begin ░░░░░░░░ remove policy accommodation it ░░░░░░░░ the Committee s current ░░░░░░░░ that even after employment ░░░░░░░░ inflation are near mandate ░░░░░░░░ levels economic conditions may ░░░░░░░░ some time warrant keeping ░░░░░░░░ target federal funds rate ░░░░░░░░ levels the Committee views ░░░░░░░░ normal in the longer ░░░░░░░░ This guidance is consistent ░░░░░░░░ the paths for appropriate ░░░░░░░░ as reported in the ░░░░░░░░ projections As I will ░░░░░░░░ in a moment the ░░░░░░░░ now anticipates that it ░░░░░░░░ continue to establish a ░░░░░░░░ range rather than a ░░░░░░░░ point for the federal ░░░░░░░░ rate when normalization begins ░░░░░░░░ the dots in the ░░░░░░░░ I ve distributed now ░░░░░░░░ for each participant the ░░░░░░░░ of this target range ░░░░░░░░ although the central tendency ░░░░░░░░ the unemployment rate in ░░░░░░░░ 2016 is slightly below ░░░░░░░░ estimated longer run value ░░░░░░░░ the central tendency for ░░░░░░░░ is close to our ░░░░░░░░ percent objective the median ░░░░░░░░ for the federal funds ░░░░░░░░ at the end of ░░░░░░░░ at 2 9 percent ░░░░░░░░ nearly a percentage point ░░░░░░░░ the longer run value ░░░░░░░░ 33 4 percent or ░░░░░░░░ projected by most participants ░░░░░░░░ FOMC participants provide a ░░░░░░░░ of explanations for the ░░░░░░░░ funds rate running below ░░░░░░░░ longer run normal level ░░░░░░░░ that time many cite ░░░░░░░░ residual effects of the ░░░░░░░░ crisis which although slowly ░░░░░░░░ are likely to continue ░░░░░░░░ restrain household spending constrain ░░░░░░░░ availability and depress expectations ░░░░░░░░ future growth in output ░░░░░░░░ incomes As these factors ░░░░░░░░ further most participants expect ░░░░░░░░ federal funds rate to ░░░░░░░░ close to its longer ░░░░░░░░ normal level by the ░░░░░░░░ of 2017 Let me ░░░░░░░░ however that the Committee ░░░░░░░░ expectations for the path ░░░░░░░░ the federal funds rate ░░░░░░░░ contingent on the economic ░░░░░░░░ If the economy proves ░░░░░░░░ be stronger than anticipated ░░░░░░░░ the Committee resulting in ░░░░░░░░ more rapid convergence of ░░░░░░░░ and inflation to the ░░░░░░░░ s objectives then increases ░░░░░░░░ the federal funds rate ░░░░░░░░ likely to occur sooner ░░░░░░░░ to be more rapid ░░░░░░░░ currently envisaged Conversely if ░░░░░░░░ performance disappoints increases in ░░░░░░░░ federal funds rate are ░░░░░░░░ to take place later ░░░░░░░░ to be more gradual ░░░░░░░░ me now turn to ░░░░░░░░ statement on Policy Normalization ░░░░░░░░ and Plans This statement ░░░░░░░░ intended to provide information ░░░░░░░░ the public about the ░░░░░░░░ normalization process it does ░░░░░░░░ signal a change in ░░░░░░░░ current or future stance ░░░░░░░░ monetary policy As is ░░░░░░░░ the case in setting ░░░░░░░░ the FOMC will determine ░░░░░░░░ timing and pace of ░░░░░░░░ normalization so as to ░░░░░░░░ its statutory mandate of ░░░░░░░░ employment and price stability ░░░░░░░░ the crisis the Federal ░░░░░░░░ has been providing extraordinary ░░░░░░░░ using nontraditional tools of ░░░░░░░░ policy The FOMC s ░░░░░░░░ has always been to ░░░░░░░░ to a more traditional ░░░░░░░░ and throughout this period ░░░░░░░░ Committee has been preparing ░░░░░░░░ the normalization process In ░░░░░░░░ 2011 the Committee set ░░░░░░░░ some broad principles and ░░░░░░░░ more specific tactics for ░░░░░░░░ it envisioned the normalization ░░░░░░░░ to take place In ░░░░░░░░ 2013 we noted that ░░░░░░░░ had changed significantly in ░░░░░░░░ not anticipated in June ░░░░░░░░ 2011 including the size ░░░░░░░░ composition of the Fed ░░░░░░░░ balance sheet and that ░░░░░░░░ revision of those earlier ░░░░░░░░ was appropriate The document ░░░░░░░░ today reflects our updated ░░░░░░░░ which readers of our ░░░░░░░░ will know have been ░░░░░░░░ discussion for the last ░░░░░░░░ FOMC meetings The new ░░░░░░░░ retains many broad objectives ░░░░░░░░ principles from the original ░░░░░░░░ also has some new ░░░░░░░░ As was the case ░░░░░░░░ the crisis the Committee ░░░░░░░░ to adjust the stance ░░░░░░░░ monetary policy during normalization ░░░░░░░░ through actions that influence ░░░░░░░░ level of the federal ░░░░░░░░ rate and other short ░░░░░░░░ interest rates not through ░░░░░░░░ management of the balance ░░░░░░░░ The federal funds rate ░░░░░░░░ serve as the key ░░░░░░░░ to communicate the stance ░░░░░░░░ policy To begin normalization ░░░░░░░░ Committee will raise its ░░░░░░░░ range for the federal ░░░░░░░░ rate The Committee expects ░░░░░░░░ the effective federal funds ░░░░░░░░ may vary within the ░░░░░░░░ range and could even ░░░░░░░░ outside of that range ░░░░░░░░ occasion but such movements ░░░░░░░░ have no material effect ░░░░░░░░ financial conditions or the ░░░░░░░░ economy The primary tool ░░░░░░░░ moving the federal funds ░░░░░░░░ into the target range ░░░░░░░░ be the rate of ░░░░░░░░ paid on excess reserves ░░░░░░░░ IOER The Committee expects ░░░░░░░░ the federal funds rate ░░░░░░░░ trade below the IOER ░░░░░░░░ while reserves are so ░░░░░░░░ as is the case ░░░░░░░░ present The Committee also ░░░░░░░░ to use an overnight ░░░░░░░░ repurchase agreement facility which ░░░░░░░░ transacting with a broad ░░░░░░░░ of counterparties will help ░░░░░░░░ that the federal funds ░░░░░░░░ remains in the target ░░░░░░░░ I would like to ░░░░░░░░ that the overnight RRP ░░░░░░░░ will only be used ░░░░░░░░ the extent necessary and ░░░░░░░░ be phased out when ░░░░░░░░ longer needed to help ░░░░░░░░ the federal funds rate ░░░░░░░░ addition the Committee will ░░░░░░░░ the particular settings of ░░░░░░░░ tools as needed and ░░░░░░░░ deploy other supplementary tools ░░░░░░░░ well to ensure that ░░░░░░░░ achieve our desired stance ░░░░░░░░ policy Turning now to ░░░░░░░░ plans regarding the Fed ░░░░░░░░ balance sheet the Committee ░░░░░░░░ to reduce securities holdings ░░░░░░░░ a gradual and predictable ░░░░░░░░ primarily by ceasing to ░░░░░░░░ repayments of principal on ░░░░░░░░ held in the System ░░░░░░░░ Market Account Regarding the ░░░░░░░░ for ceasing reinvestments the ░░░░░░░░ now expects this to ░░░░░░░░ after the initial increase ░░░░░░░░ the target range for ░░░░░░░░ federal funds rate The ░░░░░░░░ currently does not anticipate ░░░░░░░░ agency mortgage backed securities ░░░░░░░░ part of the normalization ░░░░░░░░ although limited sales might ░░░░░░░░ warranted in the longer ░░░░░░░░ to reduce or eliminate ░░░░░░░░ holdings the timing and ░░░░░░░░ of such sales would ░░░░░░░░ communicated to the public ░░░░░░░░ advance It is the ░░░░░░░░ s intention that the ░░░░░░░░ Reserve will in the ░░░░░░░░ run hold no more ░░░░░░░░ than necessary to implement ░░░░░░░░ policy efficiently and effectively ░░░░░░░░ that these securities will ░░░░░░░░ consist of Treasury securities ░░░░░░░░ I stated earlier today ░░░░░░░░ release of the Committee ░░░░░░░░ updated normalization plans is ░░░░░░░░ no way intended to ░░░░░░░░ a change in the ░░░░░░░░ of monetary policy Rather ░░░░░░░░ is meant simply to ░░░░░░░░ information about how the ░░░░░░░░ envisions the normalization process ░░░░░░░░ light of the changes ░░░░░░░░ economic and financial circumstances ░░░░░░░░ have occurred since we ░░░░░░░░ forth our original plans ░░░░░░░░ than three years ago ░░░░░░░░ said conditions could change ░░░░░░░░ and we will learn ░░░░░░░░ our tools during normalization ░░░░░░░░ Committee has agreed that ░░░░░░░░ is prepared to make ░░░░░░░░ adjustments to its normalization ░░░░░░░░ if warranted by economic ░░░░░░░░ financial developments Thank you ░░░░░░░░ me stop there I ░░░░░░░░ be happy to take ░░░░░░░░ questions LIESMAN Thank you ░░░░░░░░ Yellen there was some ░░░░░░░░ going into this meeting ░░░░░░░░ the phrase considerable time ░░░░░░░░ it would remain in ░░░░░░░░ statement I want to ░░░░░░░░ if you could me ░░░░░░░░ just a couple things ░░░░░░░░ it First was it ░░░░░░░░ at the FOMC as ░░░░░░░░ or not it should ░░░░░░░░ included And I m ░░░░░░░░ we ve been over ░░░░░░░░ before but what does ░░░░░░░░ mean time wise and ░░░░░░░░ s just two questions ░░░░░░░░ have just a couple ░░░░░░░░ here Is the statement ░░░░░░░░ form of forward guidance ░░░░░░░░ finally how do you ░░░░░░░░ this idea of a ░░░░░░░░ when you and others ░░░░░░░░ the FOMC have continuously ░░░░░░░░ that you re data ░░░░░░░░ to the point where ░░░░░░░░ the data were to ░░░░░░░░ would it not necessarily ░░░░░░░░ a considerable time until ░░░░░░░░ raise rates Thank you ░░░░░░░░ So of course the ░░░░░░░░ discussed its forward guidance ░░░░░░░░ and it discusses what ░░░░░░░░ appropriate forward guidance is ░░░░░░░░ every meeting This is ░░░░░░░░ of our assessment of ░░░░░░░░ conditions and the appropriate ░░░░░░░░ of monetary policy In ░░░░░░░░ of what the term ░░░░░░░░ time means the Committee ░░░░░░░░ that based on its ░░░░░░░░ of economic conditions that ░░░░░░░░ remains appropriate and it ░░░░░░░░ comfortable with it I ░░░░░░░░ if you look for ░░░░░░░░ at the projections of ░░░░░░░░ participants that are revealed ░░░░░░░░ the SEP well that ░░░░░░░░ the view of each ░░░░░░░░ in again I d ░░░░░░░░ not a Committee collective ░░░░░░░░ There is relatively little ░░░░░░░░ in the assessment of ░░░░░░░░ outlook by participants between ░░░░░░░░ meeting and the assessment ░░░░░░░░ June So the outlook ░░░░░░░░ little changed a slight ░░░░░░░░ in the anticipated path ░░░░░░░░ the unemployment rate and ░░░░░░░░ very slight uptick in ░░░░░░░░ inflation projection but really ░░░░░░░░ minimal So the outlook ░░░░░░░░ t changed that much ░░░░░░░░ June and the Committee ░░░░░░░░ comfortable with this characterization ░░░░░░░░ you said Isn t ░░░░░░░░ calendar based guidance I ░░░░░░░░ to emphasize that there ░░░░░░░░ no mechanical interpretation of ░░░░░░░░ the term considerable time ░░░░░░░░ And as I ve ░░░░░░░░ repeatedly the decisions that ░░░░░░░░ Committee makes about what ░░░░░░░░ the appropriate time to ░░░░░░░░ to raise its target ░░░░░░░░ the federal funds rate ░░░░░░░░ be data dependent And ░░░░░░░░ my opening comments just ░░░░░░░░ I again emphasized something ░░░░░░░░ ve said previously which ░░░░░░░░ that if the pace ░░░░░░░░ progress in achieving our ░░░░░░░░ were to quicken if ░░░░░░░░ were to accelerate it ░░░░░░░░ likely that the Committee ░░░░░░░░ begin raising its target ░░░░░░░░ the federal funds rate ░░░░░░░░ than is now anticipated ░░░░░░░░ might raise might then ░░░░░░░░ the federal funds rate ░░░░░░░░ a faster pace And ░░░░░░░░ opposite is also true ░░░░░░░░ the projection were to ░░░░░░░░ So there is no ░░░░░░░░ mechanical interpretation of a ░░░░░░░░ period I think it ░░░░░░░░ not be accurate to ░░░░░░░░ the Committee s guidance ░░░░░░░░ the timing of the ░░░░░░░░ funds rate and when ░░░░░░░░ will move above zero ░░░░░░░░ being calendar based The ░░░░░░░░ has started with a ░░░░░░░░ general statement of what ░░░░░░░░ how long it will ░░░░░░░░ the federal funds rate ░░░░░░░░ at zero It is ░░░░░░░░ that it will be ░░░░░░░░ at the actual and ░░░░░░░░ pace at which the ░░░░░░░░ between our employment and ░░░░░░░░ and our goals for ░░░░░░░░ variables are closing And ░░░░░░░░ what the Committee does ░░░░░░░░ each meeting is after ░░░░░░░░ that the assessment will ░░░░░░░░ into account many different ░░░░░░░░ and take into account ░░░░░░░░ pressures and other things ░░░░░░░░ goes on to provide ░░░░░░░░ that meeting its assessment ░░░░░░░░ the implications of its ░░░░░░░░ of the data at ░░░░░░░░ time And that assessment ░░░░░░░░ hasn t changed over ░░░░░░░░ last several meetings The ░░░░░░░░ based on its assessment ░░░░░░░░ each meeting has felt ░░░░░░░░ saying that based on ░░░░░░░░ assessment of those factors ░░░░░░░░ considers that it will ░░░░░░░░ likely appropriate to maintain ░░░░░░░░ current target range for ░░░░░░░░ considerable time after the ░░░░░░░░ purchase program ends especially ░░░░░░░░ inflation remains below the ░░░░░░░░ percent objective So I ░░░░░░░░ t describe that as ░░░░░░░░ know considerable time sounds ░░░░░░░░ it s a calendar ░░░░░░░░ but it is highly ░░░░░░░░ and it s linked ░░░░░░░░ the Committee s assessment ░░░░░░░░ the economy SCHNEIDER Howard ░░░░░░░░ with Reuters Thank you ░░░░░░░░ if you would help ░░░░░░░░ I mean square the ░░░░░░░░ a little bit because ░░░░░░░░ kept the guidance the ░░░░░░░░ having referred to significant ░░░░░░░░ of labor having actually ░░░░░░░░ GDP projections down a ░░░░░░░░ bit yet the rate ░░░░░░░░ gets steeper and seems ░░░░░░░░ be consolidating higher So ░░░░░░░░ it s data dependent ░░░░░░░░ accounts for the faster ░░░░░░░░ on rate increases if ░░░░░░░░ data aren t moving ░░░░░░░░ that direction Yellen Well ░░░░░░░░ growth projections for 2014 ░░░░░░░░ down a little bit ░░░░░░░░ the unemployment path is ░░░░░░░░ marginally lower So while ░░░░░░░░ projected path of the ░░░░░░░░ market unemployment and other ░░░░░░░░ of the labor market ░░░░░░░░ course is partly dependent ░░░░░░░░ the growth outlook It ░░░░░░░░ t totally dependent on ░░░░░░░░ growth outlook And the ░░░░░░░░ assesses the labor market ░░░░░░░░ continuing to improve and ░░░░░░░░ see a small reduction ░░░░░░░░ the path of the ░░░░░░░░ this year and then ░░░░░░░░ the rest of the ░░░░░░░░ period So if you ░░░░░░░░ me you asked me ░░░░░░░░ is the projected funds ░░░░░░░░ path moved up well ░░░░░░░░ know each participant knows ░░░░░░░░ reason they wrote down ░░░░░░░░ they did But as ░░░░░░░░ guess I would hazard ░░░░░░░░ I would say there ░░░░░░░░ relatively little upward movement ░░░░░░░░ the path and I ░░░░░░░░ view it as broadly ░░░░░░░░ line with what one ░░░░░░░░ expect with a very ░░░░░░░░ downward reduction in the ░░░░░░░░ for unemployment and a ░░░░░░░░ slight upward change in ░░░░░░░░ projection for inflation So ░░░░░░░░ participants in deciding on ░░░░░░░░ path I think look ░░░░░░░░ as our guidance says ░░░░░░░░ large is the gap ░░░░░░░░ performance at the labor ░░░░░░░░ and that associated with ░░░░░░░░ maximum employment objective how ░░░░░░░░ is the gap between ░░░░░░░░ and our 2 percent ░░░░░░░░ how fast will those ░░░░░░░░ change And you see ░░░░░░░░ the projections very modest ░░░░░░░░ in the size of ░░░░░░░░ gaps and modest very ░░░░░░░░ change of a slightly ░░░░░░░░ pace at which those ░░░░░░░░ would change I would ░░░░░░░░ the change in the ░░░░░░░░ both for the economy ░░░░░░░░ the path of rates ░░░░░░░░ quite modest But the ░░░░░░░░ that they move does ░░░░░░░░ the data dependence principle ░░░░░░░░ I think is really ░░░░░░░░ important for market participants ░░░░░░░░ keep in mind that ░░░░░░░░ we do will depend ░░░░░░░░ how the data unfolds ░░░░░░░░ is uncertainty about that ░░░░░░░░ as expectations and the ░░░░░░░░ performance of the economy ░░░░░░░░ you should expect to ░░░░░░░░ movements in the dots ░░░░░░░░ think it s also ░░░░░░░░ that the further you ░░░░░░░░ out in the projection ░░░░░░░░ the wider the set ░░░░░░░░ dots You see a ░░░░░░░░ range out in 2017 ░░░░░░░░ that reflects in part ░░░░░░░░ forecast by different members ░░░░░░░░ the Committee about how ░░░░░░░░ progress would be What ░░░░░░░░ don t see in ░░░░░░░░ dot so called dot ░░░░░░░░ is also the uncertainty ░░░░░░░░ each individual each participant ░░░░░░░░ around their own projection ░░░░░░░░ things will depend on ░░░░░░░░ the economy evolves That ░░░░░░░░ change over time and ░░░░░░░░ s a good deal ░░░░░░░░ uncertainty associated with it ░░░░░░░░ Thank you Madam Chair ░░░░░░░░ Condon Bloomberg News Madam ░░░░░░░░ the economy has been ░░░░░░░░ now for five years ░░░░░░░░ some economists believe the ░░░░░░░░ will last another five ░░░░░░░░ Why in your view ░░░░░░░░ economic growth not creating ░░░░░░░░ inflation and wages and ░░░░░░░░ PCE Is this all ░░░░░░░░ remaining slack in the ░░░░░░░░ market or are there ░░░░░░░░ forces at play Yellen ░░░░░░░░ to my mind the ░░░░░░░░ slow pace of wage ░░░░░░░░ does reflect slack in ░░░░░░░░ labor market We had ░░░░░░░░ very deep recession as ░░░░░░░░ perhaps to be expected ░░░░░░░░ the aftermath of a ░░░░░░░░ significant financial crisis We ░░░░░░░░ headwinds in the economy ░░░░░░░░ so the recovery has ░░░░░░░░ slow Growth has been ░░░░░░░░ and it s lasted ░░░░░░░░ five years But it ░░░░░░░░ nevertheless been slow relative ░░░░░░░░ past recoveries that have ░░░░░░░░ been associated with financial ░░░░░░░░ And while unemployment has ░░░░░░░░ way down from the ░░░░░░░░ over 10 percent level ░░░░░░░░ reached at 6 1 ░░░░░░░░ it remains significantly above ░░░░░░░░ level that most FOMC ░░░░░░░░ would regard as consistent ░░░░░░░░ normal in the longer ░░░░░░░░ 5 2 to 5 ░░░░░░░░ percent So there is ░░░░░░░░ underutilization of labor resources ░░░░░░░░ continue to discuss whether ░░░░░░░░ not the unemployment rate ░░░░░░░░ is an adequate measure ░░░░░░░░ how much underutilization of ░░░░░░░░ resources there really is ░░░░░░░░ as I went into ░░░░░░░░ in Jackson Hole and ░░░░░░░░ t repeat all of ░░░░░░░░ there are other ways ░░░░░░░░ which we see underutilization ░░░░░░░░ levels that have come ░░░░░░░░ only very marginally of ░░░░░░░░ time employment for economic ░░░░░░░░ involuntary part time employment ░░░░░░░░ some remaining shortfall of ░░░░░░░░ force participation as a ░░░░░░░░ of cyclical factors And ░░░░░░░░ I think there still ░░░░░░░░ and the statement says ░░░░░░░░ significant underutilization of labor ░░░░░░░░ and a very modest ░░░░░░░░ of wage increases that ░░░░░░░░ picked up very little ░░░░░░░░ see as essentially a ░░░░░░░░ of that HILSENRATH Jon ░░░░░░░░ from the Wall Street ░░░░░░░░ Chair Yellen I want ░░░░░░░░ come back to the ░░░░░░░░ rate projections that have ░░░░░░░░ put out today The ░░░░░░░░ I think would be ░░░░░░░░ by knowing a bit ░░░░░░░░ about where you stand ░░░░░░░░ relation to these projections ░░░░░░░░ with that in mind ░░░░░░░░ in the name of ░░░░░░░░ I wonder if you ░░░░░░░░ describe to us whether ░░░░░░░░ re at the low ░░░░░░░░ of those projections within ░░░░░░░░ central tendency or at ░░░░░░░░ high end I also ░░░░░░░░ to ask you about ░░░░░░░░ San Francisco Fed paper ░░░░░░░░ came out recently which ░░░░░░░░ that market expectations have ░░░░░░░░ running below the Fed ░░░░░░░░ own projections So I ░░░░░░░░ to ask you if ░░░░░░░░ see that as well ░░░░░░░░ whether it s all ░░░░░░░░ that market expectations might ░░░░░░░░ be aligned with the ░░░░░░░░ with what the Fed ░░░░░░░░ out today Yellen So ░░░░░░░░ respect to identifying myself ░░░░░░░░ Committee has had discussions ░░░░░░░░ the years that we ░░░░░░░░ been providing these forecasts ░░░░░░░░ the participants to the ░░░░░░░░ as to whether or ░░░░░░░░ it s desirable from ░░░░░░░░ standpoint of Committee functioning ░░░░░░░░ identify who s who ░░░░░░░░ these pictures And thus ░░░░░░░░ well occasionally an individual ░░░░░░░░ indicate in the speech ░░░░░░░░ their personal views are ░░░░░░░░ have not yet decided ░░░░░░░░ would be a desirable ░░░░░░░░ for the point of ░░░░░░░░ of our decision making ░░░░░░░░ to identify individuals We ░░░░░░░░ a subcommittee on communications ░░░░░░░░ s now chaired by ░░░░░░░░ Chair Fischer and they ░░░░░░░░ be considering the SEP ░░░░░░░░ whether or not some ░░░░░░░░ are appropriate But until ░░░░░░░░ unless there is some ░░░░░░░░ in the Committee stance ░░░░░░░░ this I don t ░░░░░░░░ to identify myself You ░░░░░░░░ second about the San ░░░░░░░░ Fed paper that did ░░░░░░░░ to a notable divergence ░░░░░░░░ market views and the ░░░░░░░░ of the Committee I ░░░░░░░░ say that there have ░░░░░░░░ any number of different ░░░░░░░░ of this topic there ░░░░░░░░ many different survey measures ░░░░░░░░ interpretations of what the ░░░░░░░░ thinks And I don ░░░░░░░░ frankly think it s ░░░░░░░░ clear that there is ░░░░░░░░ gap There are different ░░░░░░░░ on whether or not ░░░░░░░░ a gap exists To ░░░░░░░░ extent that there is ░░░░░░░░ gap one reason for ░░░░░░░░ could be that markets ░░░░░░░░ participants have different views ░░░░░░░░ the evolution of economic ░░░░░░░░ For example I think ░░░░░░░░ d note that when ░░░░░░░░ Committee participants write down ░░░░░░░░ forecast for the federal ░░░░░░░░ rate they are showing ░░░░░░░░ funds rate path that ░░░░░░░░ consider most likely Their ░░░░░░░░ forecasts are of the ░░░░░░░░ that they think are ░░░░░░░░ most likely ones You ░░░░░░░░ t see the full ░░░░░░░░ of possibilities there And ░░░░░░░░ path for the funds ░░░░░░░░ is the path that ░░░░░░░░ individual thinks is most ░░░░░░░░ Market participants understanding that ░░░░░░░░ are a range of ░░░░░░░░ outcomes with upside and ░░░░░░░░ possibilities are doing something ░░░░░░░░ different I think when ░░░░░░░░ re determining market prices ░░░░░░░░ are taking into account ░░░░░░░░ possibility that there can ░░░░░░░░ different economic outcomes including ░░░░░░░░ if they re not ░░░░░░░░ likely ones in which ░░░░░░░░ will be characterized by ░░░░░░░░ inflation or low growth ░░░░░░░░ the appropriate path of ░░░░░░░░ will be low So ░░░░░░░░ in probabilities of different ░░░░░░░░ can explain part of ░░░░░░░░ We you know want ░░░░░░░░ learn we market participants ░░░░░░░░ have different views on ░░░░░░░░ economy than the Committee ░░░░░░░░ and that s something ░░░░░░░░ want to try to ░░░░░░░░ and learn market views ░░░░░░░░ part from information of ░░░░░░░░ type What can I ░░░░░░░░ is that it is ░░░░░░░░ for market participants to ░░░░░░░░ what our likely response ░░░░░░░░ reaction function is to ░░░░░░░░ data and our job ░░░░░░░░ to try to communicate ░░░░░░░░ clearly as we can ░░░░░░░░ way in which our ░░░░░░░░ stance will depend on ░░░░░░░░ data and I promise ░░░░░░░░ try to do that ░░░░░░░░ Hi Ylan Mui Washington ░░░░░░░░ My question is about ░░░░░░░░ new exit principles You ░░░░░░░░ say that you don ░░░░░░░░ plan to end reinvestments ░░░░░░░░ after the first rate ░░░░░░░░ Can you give us ░░░░░░░░ little bit of a ░░░░░░░░ of what are the ░░░░░░░░ you re going to ░░░░░░░░ looking for when you ░░░░░░░░ began to end the ░░░░░░░░ It sounds like tapering ░░░░░░░░ reinvestments is also on ░░░░░░░░ table What might go ░░░░░░░░ your decision on whether ░░░░░░░░ not to end them ░░░░░░░░ whether or not to ░░░░░░░░ them And do you ░░░░░░░░ a general timeline for ░░░░░░░░ long you think it ░░░░░░░░ take to shrink the ░░░░░░░░ sheet once you actually ░░░░░░░░ Yellen OK All good ░░░░░░░░ So I think the ░░░░░░░░ would will be focused ░░░░░░░░ we intend to use ░░░░░░░░ path of short term ░░░░░░░░ rates as our key ░░░░░░░░ of policy And of ░░░░░░░░ market participants will be ░░░░░░░░ focused as we are ░░░░░░░░ what is the appropriate ░░░░░░░░ and pace of interest ░░░░░░░░ increases when that time ░░░░░░░░ And I think the ░░░░░░░░ would like to feel ░░░░░░░░ it has successfully begun ░░░░░░░░ normalization process and that ░░░░░░░░ re successfully communicating with ░░░░░░░░ about how that process ░░░░░░░░ be playing out over ░░░░░░░░ And I think when ░░░░░░░░ Committee is comfortable that ░░░░░░░░ process is established is ░░░░░░░░ well and we re ░░░░░░░░ with the outlook that ░░░░░░░░ will begin the process ░░░░░░░░ ceasing or possibly tapering ░░░░░░░░ eventually ceasing reinvestments So ░░░░░░░░ say that it will ░░░░░░░░ on economic and financial ░░░░░░░░ but we want to ░░░░░░░░ sure normalization is successfully ░░░░░░░░ If we were only ░░░░░░░░ shrink our balance sheet ░░░░░░░░ ceasing reinvestments it would ░░░░░░░░ take to get back ░░░░░░░░ levels of reserve balances ░░░░░░░░ we had before the ░░░░░░░░ I m not sure ░░░░░░░░ will go that low ░░░░░░░░ we ve said that ░░░░░░░░ will try to shrink ░░░░░░░░ balance sheet to the ░░░░░░░░ levels consistent with the ░░░░░░░░ and effective implementation of ░░░░░░░░ It could take to ░░░░░░░░ end of the decade ░░░░░░░░ achieve those levels APPELBAUM ░░░░░░░░ said a few moments ░░░░░░░░ that there is perhaps ░░░░░░░░ remaining shortfall of labor ░░░░░░░░ participation as result of ░░░░░░░░ factors This seems consistent ░░░░░░░░ a recent paper by ░░░░░░░░ members of your staff ░░░░░░░░ that labor force participation ░░░░░░░░ unlikely to recover Is ░░░░░░░░ now the house view ░░░░░░░░ slack essentially consists of ░░░░░░░░ plus part time workers ░░░░░░░░ want full time work ░░░░░░░░ that labor force participation ░░░░░░░░ basically out of the ░░░░░░░░ And the second question ░░░░░░░░ the statement of exit ░░░░░░░░ you said that the ░░░░░░░░ will act as soon ░░░░░░░░ economic conditions warrant There ░░░░░░░░ been an idea in ░░░░░░░░ at some point that ░░░░░░░░ might stay lower for ░░░░░░░░ as a means of ░░░░░░░░ for some of the ░░░░░░░░ done during the recession ░░░░░░░░ this an indication that ░░░░░░░░ debate has been settled ░░░░░░░░ that that idea is ░░░░░░░░ the table Yellen I ░░░░░░░░ sorry Just remind me ░░░░░░░░ was the first question ░░░░░░░░ first question APPELBAUM The ░░░░░░░░ question was Yellen Please ░░░░░░░░ The first question was ░░░░░░░░ the labor force participation ░░░░░░░░ Yellen Ah labor force ░░░░░░░░ APPELBAUM been removed from ░░░░░░░░ equation Yellen So the ░░░░░░░░ Brookings paper by the ░░░░░░░░ economists clearly indicates and ░░░░░░░░ said this at Jackson ░░░░░░░░ that there are structural ░░░░░░░░ particularly demographics but not ░░░░░░░░ demographics why labor force ░░░░░░░░ should be expected to ░░░░░░░░ over time And I ░░░░░░░░ with that and I ░░░░░░░░ that most of my ░░░░░░░░ would endorse that as ░░░░░░░░ However they did indicate ░░░░░░░░ in the paper that ░░░░░░░░ see some remaining cyclical ░░░░░░░░ By one technique that ░░░░░░░░ used they placed the ░░░░░░░░ at a quarter percent ░░░░░░░░ by another technique that ░░░░░░░░ used it could be ░░░░░░░░ believe they said as ░░░░░░░░ as 1 percent And ░░░░░░░░ my own personal view ░░░░░░░░ that there is some ░░░░░░░░ shortfall and something certainly ░░░░░░░░ within that range But ░░░░░░░░ it s a meaningful ░░░░░░░░ shortfall It s not ░░░░░░░░ so I m giving ░░░░░░░░ own personal view not ░░░░░░░░ Committee assessment that you ░░░░░░░░ I see the flat ░░░░░░░░ given the underlying downward ░░░░░░░░ in labor force participation ░░░░░░░░ might interpret the flattening ░░░░░░░░ of labor force participation ░░░░░░░░ the last year as ░░░░░░░░ that that cyclical component ░░░░░░░░ diminished somewhat I think ░░░░░░░░ is something that remains ░░░░░░░░ eventually I would certainly ░░░░░░░░ with the authors we ░░░░░░░░ expect over time to ░░░░░░░░ labor force participation declining ░░░░░░░░ then let s see ░░░░░░░░ second piece was APPELBAUM ░░░░░░░░ the debate about lower ░░░░░░░░ longer essentially over Yellen ░░░░░░░░ you know we stayed ░░░░░░░░ for a very long ░░░░░░░░ We have been at ░░░░░░░░ for a very long ░░░░░░░░ and below the levels ░░░░░░░░ some common policy rules ░░░░░░░░ now be suggesting given ░░░░░░░░ level of unemployment and ░░░░░░░░ So the recovery has ░░░░░░░░ very slow We ve ░░░░░░░░ been doing unconventional policies ░░░░░░░░ course buying assets And ░░░░░░░░ the general sense I ░░░░░░░░ we have been lower ░░░░░░░░ longer than if you ░░░░░░░░ that sentence then many ░░░░░░░░ policy rules would suggest ░░░░░░░░ in a sense that ░░░░░░░░ a policy that we ░░░░░░░░ had And once we ░░░░░░░░ it s appropriate to ░░░░░░░░ to normalize policy and ░░░░░░░░ raise the level of ░░░░░░░░ target for short term ░░░░░░░░ rates it would still ░░░░░░░░ some time for rates ░░░░░░░░ get back to levels ░░░░░░░░ can see in our ░░░░░░░░ that by the end ░░░░░░░░ 2017 the participants are ░░░░░░░░ average projecting that rates ░░░░░░░░ reach the levels they ░░░░░░░░ normal in the longer ░░░░░░░░ And similarly we could ░░░░░░░░ a similar statement with ░░░░░░░░ to where the funds ░░░░░░░░ would stand relative to ░░░░░░░░ recommendations of rules So ░░░░░░░░ would take some time ░░░░░░░░ return to those kinds ░░░░░░░░ levels CRUTSINER Thank you ░░░░░░░░ Crutsinger with the Associated ░░░░░░░░ Madam Chair there were ░░░░░░░░ dissents from today s ░░░░░░░░ I d kind of ░░░░░░░░ to get your thinking ░░░░░░░░ how you treat dissents ░░░░░░░░ think in Chairman Bernanke ░░░░░░░░ eight years the largest ░░░░░░░░ of dissents was three ░░░░░░░░ you see two dissents ░░░░░░░░ a yellow warning flashing ░░░░░░░░ that policy may need ░░░░░░░░ be moderated down the ░░░░░░░░ How should market participants ░░░░░░░░ the dissents Yellen Well ░░░░░░░░ think it s very ░░░░░░░░ that the Committee should ░░░░░░░░ a range of opinion ░░░░░░░░ a decision as crucial ░░░░░░░░ what is the right ░░░░░░░░ to begin to normalize ░░░░░░░░ and we do have ░░░░░░░░ range of views in ░░░░░░░░ Committee I don t ░░░░░░░░ two dissents to be ░░░░░░░░ abnormally large number Presidents ░░░░░░░░ and Fisher have been ░░░░░░░░ clear in all of ░░░░░░░░ speeches recently in stating ░░░░░░░░ they think the time ░░░░░░░░ come to begin normalizing ░░░░░░░░ I think they perhaps ░░░░░░░░ some concerns that if ░░░░░░░░ don t begin to ░░░░░░░░ so soon that inflation ░░░░░░░░ pick up above levels ░░░░░░░░ that they would consider ░░░░░░░░ desirable or that they ░░░░░░░░ some financial stability concerns ░░░░░░░░ the committee adapted today ░░░░░░░░ statement by an overwhelming ░░░░░░░░ and I don t ░░░░░░░░ the level of dissent ░░░░░░░░ be surprising or very ░░░░░░░░ IP Greg Ip of ░░░░░░░░ Economist There s been ░░░░░░░░ downgrade in your near ░░░░░░░░ growth forecast and a ░░░░░░░░ in your unemployment rate ░░░░░░░░ forecast Does it appear ░░░░░░░░ potential is much lower ░░░░░░░░ you thought and therefore ░░░░░░░░ is closing more quickly ░░░░░░░░ you thought This seems ░░░░░░░░ be a persistent pattern ░░░░░░░░ your forecasts Secondarily how ░░░░░░░░ are you about events ░░░░░░░░ Europe and especially the ░░░░░░░░ decline in inflation expectations ░░░░░░░░ Yellen So there s ░░░░░░░░ a little bit of ░░░░░░░░ I think even this ░░░░░░░░ in the longer run ░░░░░░░░ growth rates that Committee ░░░░░░░░ have written down You ░░░░░░░░ certainly right in saying ░░░░░░░░ over a number of ░░░░░░░░ now there s been ░░░░░░░░ pattern of forecast errors ░░░░░░░░ which either we ve ░░░░░░░░ on track with respect ░░░░░░░░ unemployment or unemployment has ░░░░░░░░ down in some cases ░░░░░░░░ than we anticipated and ░░░░░░░░ growth has pretty persistently ░░░░░░░░ surprising the Committee to ░░░░░░░░ downside and that is ░░░░░░░░ statement about productivity growth ░░░░░░░░ has been pretty disappointing ░░░░░░░░ we have had downward ░░░░░░░░ in the level of ░░░░░░░░ output and to some ░░░░░░░░ at least for a ░░░░░░░░ in the projected pace ░░░░░░░░ growth So that tension ░░░░░░░░ been there There are ░░░░░░░░ range of views about ░░░░░░░░ run growth A lot ░░░░░░░░ people are writing about ░░░░░░░░ topic I think the ░░░░░░░░ s longer run estimates ░░░░░░░░ neither at the most ░░░░░░░░ and nor the most ░░░░░░░░ end Inaudible Yellen Oh ░░░░░░░░ Europe Well I mean ░░░░░░░░ know certainly we have ░░░░░░░░ the outlook for Europe ░░░░░░░░ very low level of ░░░░░░░░ that they have seen ░░░░░░░░ and the decline that ░░░░░░░░ saw on inflationary expectations ░░░░░░░░ the slow pace of ░░░░░░░░ it is one of ░░░░░░░░ number of risks to ░░░░░░░░ global economy and we ░░░░░░░░ hope that they will ░░░░░░░░ successful in seeing the ░░░░░░░░ of growth and inflation ░░░░░░░░ up and I think ░░░░░░░░ will be good for ░░░░░░░░ global economy and the ░░░░░░░░ States HARDING Robin Harding ░░░░░░░░ the Financial Times Madam ░░░░░░░░ I want to come ░░░░░░░░ to the forward guidance ░░░░░░░░ a large part of ░░░░░░░░ Committee has recently criticized ░░░░░░░░ guidance as being calendar ░░░░░░░░ But if I understood ░░░░░░░░ comments earlier that s ░░░░░░░░ correct How should people ░░░░░░░░ that And if it ░░░░░░░░ t have a defined ░░░░░░░░ what purpose is it ░░░░░░░░ serving And do you ░░░░░░░░ to have to revisit ░░░░░░░░ in the near future ░░░░░░░░ you Yellen So we ░░░░░░░░ constantly discussing forward guidance ░░░░░░░░ thinking about whether it ░░░░░░░░ appropriate and how to ░░░░░░░░ it And we did ░░░░░░░░ a major overhaul of ░░░░░░░░ forward guidance in March ░░░░░░░░ think the Committee participants ░░░░░░░░ have spoken out on ░░░░░░░░ topic recently want to ░░░░░░░░ sure that we have ░░░░░░░░ flexibility that the Committee ░░░░░░░░ the flexibility to respond ░░░░░░░░ unfolding developments They want ░░░░░░░░ make to sure that ░░░░░░░░ progress really does turn ░░░░░░░░ to be faster than ░░░░░░░░ have we would expect ░░░░░░░░ the Committee will be ░░░░░░░░ the position to start ░░░░░░░░ tightening monitor policy They ░░░░░░░░ not want to be ░░░░░░░░ into something that the ░░░░░░░░ see as a calendar ░░░░░░░░ and firm commitment And ░░░░░░░░ they want to emphasize ░░░░░░░░ dependence of our policy ░░░░░░░░ make sure that we ░░░░░░░░ appropriate flexibility But I ░░░░░░░░ with that And as ░░░░░░░░ said earlier I think ░░░░░░░░ do not have any ░░░░░░░░ interpretation that applies to ░░░░░░░░ It of course gives ░░░░░░░░ impression about what we ░░░░░░░░ will be appropriate but ░░░░░░░░ is no mechanical interpretation ░░░░░░░░ I ve said repeatedly ░░░░░░░░ I want to say ░░░░░░░░ that if events surprise ░░░░░░░░ and we re moving ░░░░░░░░ quickly toward our objectives ░░░░░░░░ the Committee sees a ░░░░░░░░ to move sooner or ░░░░░░░░ depending on what the ░░░░░░░░ is that we do ░░░░░░░░ I do feel we ░░░░░░░░ the flexibility to move ░░░░░░░░ it is important for ░░░░░░░░ to understand that there ░░░░░░░░ uncertainty and this statement ░░░░░░░░ not some sort of ░░░░░░░░ promise about a particular ░░░░░░░░ of time BECKNER Good ░░░░░░░░ Chair Yellen Getting back ░░░░░░░░ the one aspect of ░░░░░░░░ forward guidance is the ░░░░░░░░ which you re reiterated ░░░░░░░░ the funds rate probably ░░░░░░░░ to stay below normal ░░░░░░░░ some time after achieving ░░░░░░░░ consistent levels on unemployment ░░░░░░░░ so forth The SEP ░░░░░░░░ of appropriate funds rate ░░░░░░░░ show the funds rate ░░░░░░░░ up to that 3 ░░░░░░░░ percent normal level at ░░░░░░░░ end of 2017 If ░░░░░░░░ look at the SEP ░░░░░░░░ of unemployment inflation and ░░░░░░░░ forth they seem to ░░░░░░░░ back to those mandate ░░░░░░░░ levels by the end ░░░░░░░░ 2016 if not much ░░░░░░░░ So what is the ░░░░░░░░ for waiting that much ░░░░░░░░ to get back to ░░░░░░░░ particularly when you have ░░░░░░░░ a large balance sheet ░░░░░░░░ you intend to reduce ░░░░░░░░ gradually Is there a ░░░░░░░░ of getting behind the ░░░░░░░░ And secondly can I ░░░░░░░░ ask Can you envision ░░░░░░░░ time when to reduce ░░░░░░░░ pressures you may have ░░░░░░░░ resort to asset sales ░░░░░░░░ you don t anticipate ░░░░░░░░ now Yellen So on ░░░░░░░░ first question of some ░░░░░░░░ before rates return to ░░░░░░░░ levels as I mentioned ░░░░░░░░ can see in the ░░░░░░░░ that by the end ░░░░░░░░ 2017 many participants are ░░░░░░░░ that rates will return ░░░░░░░░ what they think are ░░░░░░░░ longer run levels but ░░░░░░░░ economy in their view ░░░░░░░░ have probably gotten back ░░░░░░░░ normal levels of unemployment ░░░░░░░░ near normal levels of ░░░░░░░░ sometime in 2016 So ░░░░░░░░ looks like a year ░░░░░░░░ more in which rates ░░░░░░░░ be below normal longer ░░░░░░░░ levels We asked participants ░░░░░░░░ they hold the views ░░░░░░░░ they do about appropriate ░░░░░░░░ and there are number ░░░░░░░░ different explanations that participants ░░░░░░░░ But a common view ░░░░░░░░ this is that there ░░░░░░░░ been a variety of ░░░░░░░░ resulting from the crisis ░░░░░░░░ have slowed growth led ░░░░░░░░ a sluggish recovery from ░░░░░░░░ crisis and that these ░░░░░░░░ will dissipate only slowly ░░░░░░░░ they are dissipating An ░░░░░░░░ would be the fact ░░░░░░░░ mortgage credit really is ░░░░░░░░ this point available really ░░░░░░░░ those with pristine credit ░░░░░░░░ conditions there are abnormally ░░░░░░░░ Another thing that we ░░░░░░░░ is that households expectations ░░░░░░░░ their likely income paths ░░░░░░░░ quite depressed relative to ░░░░░░░░ crisis levels That s ░░░░░░░░ that may be holding ░░░░░░░░ spending So the view ░░░░░░░░ be those forces will ░░░░░░░░ over time but only ░░░░░░░░ gradually And in addition ░░░░░░░░ have had slow productivity ░░░░░░░░ and a slow pace ░░░░░░░░ potential output likely depresses ░░░░░░░░ pace of investment spending ░░░░░░░░ so those are some ░░░░░░░░ the things that participants ░░░░░░░░ is why it will ░░░░░░░░ some time to get ░░░░░░░░ So the story is ░░░░░░░░ s not that the ░░░░░░░░ is behind the curve ░░░░░░░░ failing to return the ░░░░░░░░ rate to normal levels ░░░░░░░░ the economy is recovered ░░░░░░░░ is rather that in ░░░░░░░░ to achieve such a ░░░░░░░░ in 2016 or by ░░░░░░░░ end that it s ░░░░░░░░ and appropriate to have ░░░░░░░░ more accommodative policy than ░░░░░░░░ be normal in the ░░░░░░░░ of those headwinds Barnes ░░░░░░░░ Barnes of Fox Business ░░░░░░░░ am I would like ░░░░░░░░ follow up on Greg ░░░░░░░░ question about Europe because ░░░░░░░░ Scotland is going to ░░░░░░░░ voting on independence from ░░░░░░░░ Britain and there s ░░░░░░░░ concern that if it ░░░░░░░░ vote to break from ░░░░░░░░ Britain that this could ░░░░░░░░ some turmoil in global ░░░░░░░░ markets and the global ░░░░░░░░ Are you concerned about ░░░░░░░░ Do you see any ░░░░░░░░ if Scotland does vote ░░░░░░░░ independence on the European ░░░░░░░░ and potentially on the ░░░░░░░░ economy And if so ░░░░░░░░ the Fed doing anything ░░░░░░░░ preparation for that possibility ░░░░░░░░ you Yellen Well Scottish ░░░░░░░░ are about to go ░░░░░░░░ the polls tomorrow and ░░░░░░░░ ve had a good ░░░░░░░░ about this topic And ░░░░░░░░ of that I really ░░░░░░░░ t want to weigh ░░░░░░░░ on this today DA ░░░░░░░░ Thank you Pedro da ░░░░░░░░ with Dow Jones Newswires ░░░░░░░░ question is about your ░░░░░░░░ views about whether a ░░░░░░░░ approach to tightening is ░░░░░░░░ than a more aggressive ░░░░░░░░ less predictable one because ░░░░░░░░ was some discussion about ░░░░░░░░ and externally about whether ░░░░░░░░ was the Fed s ░░░░░░░░ in the 2004 ish ░░░░░░░░ that kind of created ░░░░░░░░ conditions of complacency that ░░░░░░░░ to the housing bubble ░░░░░░░░ I wonder if you ░░░░░░░░ be more inclined to ░░░░░░░░ gradualist in your approach ░░░░░░░░ more transparent in outlining ░░░░░░░░ moves or whether you ░░░░░░░░ keeping the market guessing ░░░░░░░░ s some values for ░░░░░░░░ Thanks Yellen You know ░░░░░░░░ is something the Committee ░░░░░░░░ going to have to ░░░░░░░░ when the time comes ░░░░░░░░ normalize policy Looking back ░░░░░░░░ the period the run ░░░░░░░░ to the financial crisis ░░░░░░░░ don t think by ░░░░░░░░ means measured pace and ░░░░░░░░ very predictable pace of ░░░░░░░░ basis points per meeting ░░░░░░░░ why we had a ░░░░░░░░ crisis but it may ░░░░░░░░ diminished volatility and been ░░░░░░░░ small contributing factor and ░░░░░░░░ Committee will have to ░░░░░░░░ about how to do ░░░░░░░░ I think many people ░░░░░░░░ the aftermath of that ░░░░░░░░ think that somewhat less ░░░░░░░░ a mechanical pace would ░░░░░░░░ be better but this ░░░░░░░░ a matter that we ░░░░░░░░ in due time have ░░░░░░░░ discuss.”