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Populio aelivy stdyarciti re rtr gn o irong coitnsf e bomaet okg aadwe eecthjob ndio wl rength sowh fth. Tuintonfti, e mthhae t pce defo psol nsptn peitesoso ar n nuy. Uproleha1 as suer atisasarlyrin erris icavbe crsiectlafr rlr dlis. Renfti, ic elus laleney d fd pce antes tbeetr incar ofurenfti, s enitehaedn rent mthat aut 3 . Eec ce inflioto me a ora inflaono abizarnd veth nextouef arinin wi oonr n jeiv le mnourn tohecomi ojtis at we bmte fohime b cmiee rtipts as always, participants conditioned their projections on their own individual views of appropriate Monetary Policy. Which in turn depend on each participants assessment of the many factors that shape the outlook. The median projection for growth of inflation adjusted Gross Domestic Product is 2. 1 this year and next and inches down to 1. 9 in 2019. Slightly above its estimated longer run rate. The median projection for the Unemployment Rate stands at 4. 5 in the Fourth Quarter of this year an remains at that level over the next twoears, modestly below the median estimate of its longer run normal rate. Finally, the median inflation projection is 1. 9 this year and rises to 2 in 2018 and 2019. These Economic Projections are very little changed from those made in december. Returning to Monetary Policy, the committee judged that a modest increase in the federal funds rate is appropriate in light of the economys solid progress toward our goals of maximum employment and price stability. Even after this increase, Monetary Policy remains accommodative, supporting some further strengthening in the job market and a sustained return to 2 inflation. Todays decision also reflects our view that waiting too long to scale back some accommodations could potentially require us to raise rates rapidly sometime down the road. Which in turn could risk disrupting Financial Markets and pushing the economy into recession. We continue to expect that the on fwoing strength of the economy will warrant gradual increases in the federal funds rate to achieve and maintain our objectives. Thats based on our view that the neutral, nominal federal funds rate, the Interest Rate that is neither expansionnary nor contractionnary and keeps the economy operating on an even keel is currently quite low by historical standards. That means that the federal funds rate does not have to rise by all that much to get to a neutral policy stance. We also expect a newel the neutral level of the federal funds rate to rise somewhat over time, meaning that additional, gradual rate hikes are likely to be appropriate over the next few years to sustain the economic expansion. Even so, the committee continues to anticipate that the longer run neutral level of the federal funds rate is still likely to remain below levels that prevailed in previous decades. This view is consistent with parties pabts projections of appropriate Monetary Policy. The median projection for the federal funds rate is 1. 4 at the end of this year. 2. 1 at the end of next year, and 3 at the end of 2019. In line with its estimated longer run value. Compared with the projections median ecember, the path for the federal funds rate is essentially unchanged. As always, the Economic Outlook is highly uncertain and participants will adjust their assessments of the appropriate path for the federal funds rate in response to changes to their Economic Outlooks and views of the risks to their outlooks. Changes in economic policies including fiscal and other policies could potentially affect the Economic Outlook. Of course it is still too early to know how these policies will unfold. Moreover, fiscal policy is only one of many factors that can influence the outlook. In making our decisions, we will continue as always to assess Economic Conditions relative to our duel mandate. As to our dual mandate. As i noted previously, policy is not on a preset course. Finally, we will continue to reinvest proceeds from maturing treasury securities and principal payments from agency debt and Mortgage Backed securities. This policy, by keeping the committees holdings of longer term securities, at sizable levels has helped maintain accommodative financial conditions. As a matter of prudent planning, we discussed at this meeting a number of issues related to an eventual change to our reinvestment policy. We made no decisions an we will continue our discussion at subsequent meetings. In keeping with this in keeping with the principle of normalizing our Balance Sheet will be gradual and predictable, well provide more information about our plans as it becomes available. Thank you. Id be happy to take your questions. Reporter on the last topic, the Balance Sheet normalization, clearly you said you done want to start pulling in the size of the Balance Sheet until normalization is well under way. Could you give us a sense of what well under way means, at least in your mind . What kind of hurdleses are you setting, what kind of conditions would you like to see in is it just a mat ear they have shortterm federal funds rate thats being the main issue . And what kind of role do you see the role of the Balance Sheet playing in the normalization process over the longer term . Is it an active tool or a passive tool . Thanks. Ms. Yellen let me start with the second question first. Weve emphasized for quite some time that the committee wishes to use variations in the fed funds rate target, our shortterm Interest Rate target, as our key active tool of policy. We think its much easier in using that tool to communicate the stance of policy. We have much more experience with it and have a letter idea of its impact on the economy. So while the Balance Sheet as it purchases, or or its purchases, are tools we could conceivably resort to if we found ourselveses in a serious downturn where we were again up against the zero bound an faced with substantial weakness in the economy, its not a tool that we would want to use as a routine tool of policy. You asked what well under way means. I cant give you a specific answer to that. And i think the right the right way to look at it is in qualitative and not quantitative terms. It doesnt mean some particular cutoff level to the federal funds rate that when weve reached that level we would consider ourselves well under way. I think what we want to have is confidence in the economys trajectory, a sense that the economy will make progress, that were not overly worried about Downside Risks and adverse shocks that could hit the economy that could quickly, after setting it off on the path to shrinking the Balance Sheet fwradgeulely over time cause us to want to begin to add Monetary Policy accommodation so i think it has to do with the balance of risks and confidence in the Economic Outlook and not simply the level of the federal funds ate. Thank you, jason lane with westwarders. You mentioned that you dont that you want to not have to raise rates rapidly if you were to fall behind the curve. In the current context, gradual has been very, very gradual. Could you describe what a rapid rate of increase is, how that should be understood . So, im not sure that i can tell you what a rapid rate of increase is. I think the trajectory you see is the median in our projections which this year looks to a total of three increases that certainly qualifies as gradual. My comfort in using the term gradual comes back in part to my judgment that the neutral level of the federal funds rate, namely the level of the federal funds rate that would keep the economy operating on an even keel, its a rate where we neither are pressing on the brake nor pushing down on the accelerator, that level of Interest Rates is quite low. So at present i see Monetary Policy as accommodative, namely the current level of the federal funds rate is below that neutral rate, but not very far below the neutral rate. Were closing in, i think, on our employment objective. Were coming closer on our inflation objectives, as we reach those objectives and particularly in light of the fact that we see the risks to the outlook at roughly balanced at this point and thats been our assessment to the last several meetings. It looks to us to be appropriate to gradually raise the federal funds rate back in the direction of neutral. And exactly how many increases is that . You know, the sep giveus a sense of what Committee Participants envision in a concrete sense but you know, if its one more or one less, i think that still, thats still that still qualified to my mind as gradual. I think if you compare with any previous tightening cycle, i remember when rates for raised at every meeting starting in mid 2004. And i think people thought that was a fwradgeule pace, measured pace. Were certainly not envisioning Something Like that. Both the o. E. Both the oecd and i. M. F. Raised their forecast for u. S. Growth in part because of the policies expected from the new administration. Yet the fed has not and i take it from your comment at the very beginning that this these forecasts today represent no reassessment. Has the committee discussed what policy might look like in the event that there are large tax cuts passed or Infrastructure Spending passed . And what might policy look like if those policies become law . Finally, why did you remove the word only before the word gradual when you talked about future rate increases . Ms. Yellen we have not discussed in detail potential policy changes. That could be put into place. We have not tried to map out what o resnse would be to particular policy measures. We recognize that there is great uncertainty about the timing, the size, the character of policy changes that may be put in place and dont think that thats a decision or a set of decisions that we need to make until we know more about what policy changes will go into effect so i do want to emphasize at while some participants have penciled in some fiscal policy changes into their projections, that the basis for todays decision is simply our assess. Of the progress we of the economy against our longestablished goals of maximum employment and price stability. Theres nothing that we have done or anticipate that is a speculation. I think its fair to say theres nothing thats a speculation about preemptive responses to future policy moves. We have plenty of time to see what happens. We did remove the word only, in the Statement Today from gradual. I think this is something that shouldnt be overinterpreted. I regard it as a relatively small thing and think its appropriate for you toonsider it in the context, for example, of the fact that our Economic Projections are virtually identical to those that we issued in december. Theyre essentially unchanged, both in terms of the path of the economy and the path of the federal funds rate. A we have carried out a modest adjustment of the federal funds rate because we have seen the economy progressing over the last several months in exactly the way that we anticipated. We havent in any way changed our view about where the economy is heading or the risks. We have long said that if the economy progressed, an its been doing nicely. I think in making progress, in showing resilience, have some confidence in the path the economy is on. And if we continue to feel that, we will likely regard it as appropriate to make some further moves to scale back accommodation to move toward neutral along the lines in the sep. Obviously there are surprises, our Economic Forecast can change. But the word gradual, i think, emphasizes that if things continue in the manner that weve been going as we have said now for quite some time, we think the gradual gradual increases in the federal funds rate will be appropriate. This is not a, you know, this is not a significant this is not significant change. Peter barnes, fox business, speaking of fiscal policy have you had a chance to meet with the new treasury secretary, mr. Mnuchin, and if not, when will you meet with him and what will you talk to him about. And have you had a chance to meet with President Trump and talk to him and if not would you and what would you like to talk to . Ive met ms. Yellen ive met a couple of times with the treasury secretary. I think you know its traditional for fed chairs and secretaries of treasury to meet on a regular basis. I fully expect to have a strong relationship with secretary mnuchin. Weve had very good discussions about the economy, about regulatory objectives, the work of the fstock, Global Economic developments and i continue to look forward to working with him. I was introduced to the president , i had a very brief meeting and preeshed that as well. Anna swanson, washington post. You said that the newel ral level of the federal funds rate is quite low. How close do you judge it to be to the inflation rate and what do you anticipate will be the force pushing up the neutral Interest Rate over the next few years . Could fiscal policy be among those . Ms. Yellen ive given a number of recent speeches on this topic where i develop my views. More fully. I would say over the longer run that means going several years out. I think the evidence suggests that the neutral rate may be something in real terms that might be close to 1 or a little bit under that. That would be consistent with the median longer run value of the federal funds rate in our Economic Projections for the last several meetings. 3 is the locker run. Normal federal funds rate our participants estimate in real terms with the 2 inflation objective and that is 1 in real terms. And why is it so low . Well, i think there is strong evidence that accumulated that this rate has been falling not just in the United States but in many advanced nations and the decline probably predates the financial crisis. It reflects population growth and slower productivity growth and here and many other advanced nations. Some recent work suggests that at the present time, the neutral real rate is yet lower than that. And some estimates place it around zero in real terms. So i think the lower current rate arguably reflects headwinds that are left over from the financial crisis. One form of headwind has been caution and restraint and risk aversion on the part of households and businesses. It has held back spending decisions and i suppose my judgment is that it will move up over time we flects the notion graduallyof that will dissipate over the years. There is some certainty about the neutral rate and as you mentioned, it can be affected by shifts in fiscal policy. How are the neutral rates affected by fiscal policy that depend iortantly on the nature, the size of the fiscal shifert and the effect it has both on demand and supply in the economy. [inaudible] wall street journal. Between the release of the previous minutes last month and your speech in chicago earlier this month, Market Expectations about an increase in rates today changed quite dramatically. What happened over the course of those two weeks to make a bid in signalling the idea of raising rates at todays meeting . And why do you think the market as so out of sync of where the central bank was . Chair yellen so, when i look at our sequence of commune cages, they seem to me to have been reasonably consistent over this entire period. We had indicated in december that we expect we saw the risk as balanced and if the economy continued to progress along the lines we expected, that several rate increases would likely be appropriate. The minutes of our january meeting indicated that many participants sought an increase in the funds rate would be appropriate fairly soon if things continued along those lines. I indicated in my congressional that ony that i thought indeed, the economy was progressing in line with our expectations. And as i think all of us having met having that expectation and if the economy continued to progress along the lines that we expected and we continued to see the risks as balanced, do regard it as appropriate to gradually remove accommodation thats in place. By having several Interest Rate increases this year, as we saw the data continued to come in in line with our expectations, my colleagues and i continued to speak out that said that was our expectation. Now when you asked me, how did we get out of sync with the market, this is something i tried to reflect on in the remarks i gave in chicago. It is true in 2015 and 2016, we raised the federal funds rate only once and perhaps Market Participants have been influenced by that pattern. I did try to explain the reasons why we had moved so slowly during those two years and it reflects, i think a set of shocks, partly eminating from the Global Economy and risks that we saw at the outlook as well as fundamental assessments. These assessments pertaining to the neutral level of the federal funds rate and the normal level of the Unemployment Rate. So i think they are reasons. But it is important for the public to understand that were getting closer to reaching our objectives. The policy is accommodating and the level of the neutral federal funds rate is probably quite low. We nevertheless havent a stance of policy and it will be appropriate to move toward a neutral stance if we continue on the path were on. New york times. The bank for International Settlements has raised concerns that they have an attentive to inflation and stock Market Investors in the United States the trump or administration and how much is that a concern and if not, why not, given the elevated level of stock prices . Chair yellen we do look at financial conditions in form you lating our view of the outlook and stock prices do figure into financial conditions. So i think the higher level of stock prices is one factor and ooks like its likely to match consumption spending. And we noted in the last several months that this particularly for lower corporate issuers have narrowed which is another signal that financial conditions have become somewhat easier. Now on the other side, longer term Interest Rates grew up some in recent months and the dollar is a little stronger. How does that net out . Analysts that produce financial affect ns, index that financial conditions and for some of the more prominent analysts, i think the conclusion we reached is that financial conditions have eased and partly driven by the stock market. And that is the factor that affects the outlook. Associated press. You and secretary mnuchin will be meeting in germany this weekend. What do you expect to find there . Do you think the Group Assessment is that the world economies are doing better or do you think there will be worries about risk . And would one of those that the fed might raise rates too quickly . Chair yellen we change views on the Economic Outlooks and developments in our countries and it will be my objective to explain u. S. Monetary policy and make the same points to them that i made here already today about what the outlook is for Monetary Policy in the United States. I think its fair to say that the Global Economy is doing better than it was the last time. I got together with my counterparts in the g20 that butrisks look more balanced there are significant risks mediumterm facing the Global Economy and im sure that will e discussed as well. Los angeles times. You said and your colleagues arent making decisions about fiscal policies, but many are. Home builders sentiment was at its highest level. Are you concerned about the fects such as tax cuts and Infrastructure Spending dont get enacted or get delayed . Chair yellen our Statement Last time noted there had been mprovement in business and household sentment. Its uncertain how much sentment impacts spending decisions and i wouldnt say at this point that i have seen hard evidence of any change in spending decisions based on expectations about the future. We exchange around the table what we learn from our many business contacts and i think its fair to say that many of my colleagues and i note a much more optimistic frame of mind among many businesses in recent months. But most of the Business People we have talked to also have a waitandsee attitude and are very hopeful that they will be expand investment and looking forward to doing that, but are waiting to see what will happen. We will watch that. And if we were to see a major shift in spending reflecting those expectations, that could affect the outlook. Im not seeing it at this point. But the shift in sentiment is obvious and notable. Im from dow jones. There is a perception out there that the fed could stand in the way of the Economic Growth policies that the new administration is pursuing. Given that the fed is projecting 1. 8 growth in the long run, is this a potential conflict in the future . Chair yellen i dont believe it is a point of conflict. We would welcome stronger Economic Growth in the case of price stability. And if policies were put in place to speed growth, i certainly urge the administration to consider licies that would boost productivity growth and potential to grow. Think those would be very welcome changes that we would like to see. Kathleen hayes by bloomberg. I would like to take the opposite side of this and Market Expectations and how the markets got things wrong and you clarified. For example, if the latest g. D. P. Track of the First Quarter is 0. 9 and retail sales report that was mixed and previous months make it look better. Im underscoring the waitandsee attitude. You look at wages are not moving up. And in fact, if you look and you yourself have said in the past the fact that it is happening is perhaps there is an indication there is slack in the labor market. In another sense, what happened between december and march, g. D. P. Was tracking well. Consumer is not picking very much. Fiscal policy and we dont know what is going to happen with donald trump and you have to raise rates. What is the motivation . Why does the fed have to move now . Chair yellen g. D. P. Is a pretty noisy indicator. I would describe our economy as one that has been growing around 2 per year. And as you can see from our projections that is something we expect to continue over the next couple of years. Now that case of growth has been consistent with pace of job creation that is more rapid than what is sustainable if Labor Force Participation begins to move down in line with what we see is the longer run trend with an aging population. Now unemployment hasnt moved that march in part because people have been drawn into the labor force. Labor force participation, as i mentioned in my remarks, has been about flat over the last three years. So in that sense, the economy has shown over the last several years that it may have had more room to run than some people might have estimated and thats been good. Meant we had a great deal of job creation over these years. And there could be room left for that to play out further. In fact, look, policy remains an accommodator and expect movement in the labor markets and expect the Unemployment Rate to move down further and stay down for the next several years. So we expect that policy is appropriate as one that is going to lead to further strengthening in the labor market. Just quickly then, i want to underscore following on that, you expect it to move. At if it doesnt and what if d. P. What they stuck at 1. 7 . There is a risk in the median orecast. Chair yellen policy is not set in stone. It is dated dependent and we are not locked into any particular policy path. S you said, the data has not notably strengthened. There is noise in the data from quarter to quarter but we have to change our view. We think we are on the same path. We havent boosted the outlook projected, faster growth. We think we are moving along the same course we have been on, but it is one that involves gradual tightening in the labor market. I would describe some measures of wage growth of having moved up some. Some measures havent moved but wage growth is gradually moving up and showing strengthening of the labor market and we expect policy to remain accommodatetive. The e are removing accommodation and moving towards neutral and we are continuing to provide accommodation to the economy that is allowing it to grow that is consistent with further improvement in the labor arket. The administration reiterated its support of glass steegell and secretary treasury mnuchin as called for a 21 Century Glass steegell. Is the fundamental idea separating a fruitful line of inquiry . This the right path to be pursuing . Chair yellen i have not seen any concrete proposals along this line. I dont know what a 21 Century Glass steegell would look like. I think my reading on the financial crisis is that that snt the major source of the financial crisis. In fact, many of the problems emanated from firms that were Investment Banking units. An important reform in the aftermath of the crisis was to make sure that Investment Banking activities where it were a core part of the shadow Banking System where leverages had built, that those were weropriately and thats what used, tried to do. But obviously would would look at any proposals that are put forward. Im not aware of any anything oncrete to react to. I dont think it was the cause of the financial crisis and we have strengthened supervision of Bank Holding Companies that incorporate Investment Banking ctivities. Nbc news. What message are you trying to send consumers with this particular rate hike . Chair yellen thats a great question and the economy is doing well. We have confidence in the robustness of the economy and its resilience to shock. It has performed well over the last several years and we have created after the fib shal crisis around 16 million jobs. The Unemployment Rate has moved way down and many more people feel optimistic about their prospects in the labor markets. There is job security. You are seeing more people who are feeling free to quit their jobs and getting outside offers, looking for other opportunities. So i think the job market, which is an important focus for us is certainly improving. Its not to say that labor Market Conditions for every individual in the United States, we know there are problems that face particularly people with less skill and education in certain sectors of the economy. But Many Americans are enjoying a stronger labor market and feel very much better about that. And inflation is moving up to our 2 objective. And we are operating in an environment where the u. S. Economy is performing well and seems pretty balanced. I think people can feel pretty good about the Economic Outlook. [inautomobile] you emphasized in a statement hat the target rate is symmetric and why did you do that and how much of an overshoot would the fed be able to toller ate and for how long ago . Chair yellen a couple of years ago, we included the word symmetric in our longer term goals and it is appropriate to introduce that word into the statement because we had previously indicated there was a shortfall with inflation from our 2 objective. Inflation has moved back up to 2 . Which i indicated, a betterforward looking measure for inflation. Its not our target but worth looking at because it is a better forward looking predictor of headline inflation. That is still running a little bit under 2 but we expect it to move up to 2. And good time to remind americans what our objective is 2 inflation. Inflation is not always going to be at 2 . Like economic variables, it fluctuates. Sometimes it is going to be below 2 and sometimes above 2 . We had a long period where inflation was under 2 . As we move past 2 , there will be some times when it is above 2 as well. And its a reminder, 2 is not a ceiling on inflation but a target. We want inflation to be headed and we want it to be above 2 just like it was below 2 . We are not shooting for inflation above 2 but it is a reminder it will be a deficient yation above and below when we are achieving our objective. There was an overshoot, we would put in place policies to bring inflation back to 2 . The core set of principles that we have adopted in our statement on longer run goals and strategies and how long it would take to get back to 2 would depend on what would happen with respect to employment and our other objectives. There are no hard and fast answers to that. Cnn. Some fiscal policy proposals such as the bder adjustment tax would cause the dollar to increase. But if the dollar were to strengthen quickly over a short period of time, 20 for whatever reason, what do you think the impact would be on the u. S. Economy, particularly in exports and manufacturing and what do you think would be implications for u. S. Monetary policy . Chair yellen thats a difficult question to answer. You ask that question rather in an isolated way, what would be appreciation of the dollar would be, but you asked about it in the context of a border tax adjustment . Is that right . Because the arguments that are made with a border tax would do with an adjustment is to raise the price of imported goods into the United States and the large movement in the dollar that analysts claim would occur would essentially, if it were complete, would fully offset the impacts of the border tax on u. S. Import goods. It would have an impact on u. S. Inflation or g. D. P. Growth. But a question thats very different, different matter than if suddenly for some reason, the dollar were simply to begin appreciating by a large amount because say there were flights of safety flows into the dollar. If the latter were to occur, there would be a big boost in the dollar and would put pressure on inflation and would have a negative effect on u. S. Export growth and tend to boost imports. But thats a different exercise. I would just say, its very uncertain exactly what would happen to the dollar. There has been a lot of discussion of that and i think ts complicated and uncertain. Politico. My question is about republicans on the House Financial Services committee wrote to you asking he fed not put forward any policies until regulations are in place. Are you all pulling back at all on any regulations, maybe not all regulations, but maybe only Going Forward with ones you see as more time sensitive. And during the hearing before that committee, you mentioned secretly the rule would have to come out before that next cycle. Are there any other timesensitive regulations . Chair yellen we dont have a lot of time sensitive regulations. Theres nothing right now that we need to get out that is a significant rule. So we have a relatively light regulatory agenda at this point. We recognize that we do have an obligation to rules that congress dictates in laws that they pass. And so that is an ongoing obligation, obligation that we have. But our calendar is relatively light at this point. With marketplace. Some critics have said its too soon to wage Interest Rates because wages havent justified enough for a rate increase. Chair yellen i would like to see wages increase and increase somewhat further. Our objective is maximum employment and inflation and we need to consider what rate is appropriate as far as those objectives. Unfortunately one of the things that has been holding down wage increases is slow productivity growth. And we are seeing upward pressure as the labor market tightens. I take that as a signal we are ming closer to our maximum employment objectives. For those focusing on wage growth, productivity is an additional important factor. [captions Copyright National cable satellite corp. 2017] captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org the house should be coming back into session from recess momentarily with members set to vote on three bills that were debated this afternoon followed by speeches. One of those bills redesignates the Martin Luther king junior Historic Site in georgia as the Martin Luther king junior as the National Historical park. Members will return in just a few moments. As our live coverage continues here on cspan