This is going to be one of the areas where we work together, and, frankly, where we protect discretionary funding that you got last year due to bipartisan efforts on this committee and we will try to build on that and, frankly, hopefully we can go to the question i asked in the first round and that is perhaps do a little bit better than even the president proposed council proposed a generous increase. But if we could go beyond that and push put additional means in your hands. I know on a bipartisan basis we will want to do that. Thank you. Thank you very much, mr. Chairman. You speak for all of us. Thank you. Spent this morning on cspan2 secretary of defense Ashton Carter sits down with mike allen it will take you there live at 8 a. M. Eastern. Then a panel on israels influence in u. S. Government posted by the American Educational trust and institute for research. That is live at 9 a. M. Eastern also on cspan2. The chair of the Federal Reserve janet yellen spoke at a News Conference after a twoday meeting with the federal open Market Committee. She says while the labor market continues to strengthen, Global Economic and financial developments continue to pose risks. This is about an hour. Good afternoon. Today, the federal open Market Committee decided to maintain the target range for the federal funds rate at. 25 to. 50 . Our decision to keep this accommodative policy stance reflects both our assessment of the Economic Outlook and the risks associated with that outlook. The committees baseline expectations for Economic Activity, the labor market, and inflation have not changed much since december. With appropriate Monetary Policy, we continue to expect moderate Economic Growth, further labor market improvement, and a return of inflation to our 2 objective in two to three years. However, Global Economic and financial developments continue to pose risks. Against this backdrop, the committee judged it prudent to maintain the current policy stance at todays meeting. I will come back to our policy decision momentarily, but first let me review recent economic developments and the outlook. The labor market continues to strengthen. Over the most recent three months, job gains averaged nearly 230,000 per month, similar to the pace experienced over the past year. The Unemployment Rate was 4. 9 in the first two months of the year, about in line with the median of fomc participants estimates of its longerrun normal level. A broader measure of unemployment that includes individuals who want and are available to work but have not actively searched recently and people who are working part time but would rather work full time has continued to improve. Of note, the Labor Force Participation rate has turned up noticeably since the fall, with more people working or actively looking for work as the prospects for finding jobs have improved. But there is still room for improvement. Involuntary parttime employment remains somewhat elevated, and wage growth has yet to show a sustained pickup. The improvement in Employment Conditions so far this year has occurred as Economic Growth appears to have picked up from the modest pace seen in the Fourth Quarter of last year. Household spending is expanding at a moderate rate, supported by continued job gains and increases in inflationadjusted incomes. In contrast, Business Investment has been weak, in part reflecting further reductions in oil drilling as a result of low oil prices. Net exports also remain soft as a consequence of subdued foreign growth and the earlier appreciation of the dollar. Looking ahead, the committee expects that, with gradual adjustments in the stance of Monetary Policy, Economic Activity will continue to expand at a moderate pace and labor market indicators will continue to strengthen. Ongoing Economic Growth and additional strengthening in labor Market Conditions are important factors underpinning the inflation outlook. Overall Consumer Price inflation, as measured by the price index for personal consumption expenditures, stepped up to 1. 25 over the 12 months ending in january, as the sharp decline in Energy Prices around the end of 2014 dropped out of the yearoveryear figures. Core inflation which excludes energy and food prices has also picked up, although it remains to be seen if this firming will be sustained. In particular, the earlier declines in Energy Prices and appreciation of the dollar could well continue to weigh on overall Consumer Prices. But once these transitory influences fade, and as the labor market strengthens further, the committee expects inflation to rise to 2 over the next two to three years. The committees inflation outlook rests importantly on its judgment that longerrun Inflation Expectations remain reasonably well anchored. However, the stability of longerrun Inflation Expectations cannot be taken for granted. Surveybased measures of longerrun Inflation Expectations are little changed, on balance, in recent months although some remain near historically low levels. Marketbased measures of inflation compensation also remain low. Movements in these indicators reflect many factors and therefore may not provide an accurate reading on changes in the Inflation Expectations that are most relevant for wage and price setting. Nonetheless, our statement continues to emphasize that, in considering future policy decisions, we will carefully monitor actual and expected progress toward our inflation goal. This general assessment of the outlook is reflected in the individual Economic Projections submitted for this meeting by fomc participants. As always, each participants projections are conditioned on his or her own view of appropriate Monetary Policy, which, in turn, depends on each persons assessment of the multitude of factors that shape the outlook. Participants projections for growth of inflationadjusted Gross Domestic Product are just a touch lower than the projections made in conjunction with the December Fomc meeting. The median growth projection edges down from 2. 2 this year to 2 in 2018, in line with its estimated longerrun rate. The median projection for the Unemployment Rate falls from 4. 7 at the end of this year to 4. 5 at the end of 2018, somewhat below the median assessment of the longerrun normal Unemployment Rate. The median path of the Unemployment Rate is a little lower than in december, in part reflecting a slightly lower median estimate of the longerrun normal Unemployment Rate. Finally, with the transitory factors holding down inflation expected to abate and labor Market Conditions anticipated to strengthen further, the median inflation projection rises from 1. 2 this year to 1. 9 next year and 2 in 2018. The median inflation projection for this year is a little lower than in december, but thereafter the median projections are unchanged. Since the turn of the year, concerns about Global Economic prospects have led to increased Financial Market volatility and somewhat tighter financial conditions in the united states, although financial conditions have improved notably more recently. In addition, Economic Growth abroad appears to be running at a somewhat softer pace than previously expected. These unanticipated developments, however, have not resulted in material changes to the committees baseline outlook. One reason for this is that Market Expectations for the path of policy Interest Rates have moved down, and the accompanying decline in longerterm Interest Rates should help cushion any possible adverse effects on domestic Economic Activity. Indeed, while stock prices have fallen slightly since the december meeting and spreads of Investment GradeCorporate Bond yields over those on comparablematurity treasury securities have risen, Mortgage Rates and corporate borrowing costs have moved lower. Of course, the committee will continue to monitor these developments closely and will adjust the stance of Monetary Policy as needed to foster our goals of maximum employment and 2 inflation. Returning to Monetary Policy, as i noted earlier, the committee decided to maintain its target range for the federal funds rate. This decision partly reflects the implications for the u. S. Economy of the Global Economic and financial developments i just mentioned. In addition, proceeding cautiously in removing policy accommodation at this time will allow us to verify that the labor market is continuing to strengthen despite the risks from abroad. Such caution is appropriate given that shortterm Interest Rates are still near zero, which means that Monetary Policy has greater scope to respond to upside than to downside changes in the outlook. As we indicated in our statement, the committee expects that Economic Conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate. The federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. This expectation is consistent with the view that the neutral nominal federal funds rate, defined as the value of the federal funds rate that would be neither expansionary contractionary if the economy was operating near potential, is currently low by historical standards and is likely to rise only gradually over time. The low level of the neutral federal funds rate may be partially attributable to a range of persistent economic headwinds that weigh on aggregate demand, including developments abroad, a subdued pace of household formation, and meager productivity growth. There is considerable uncertainty regarding the evolution of the neutral funds rate over time. However, if these headwinds abate, as we expect, the neutral federal funds rate should gradually move higher as well. This view is implicitly reflected in participants projections of appropriate Monetary Policy. The median projection for the federal funds rate rises only gradually to 0. 9 late this year and 1. 9 next year. As the factors restraining Economic Growth are projected to fade further over time, the median rate rises to 3 by the end of 2018, close to its longer run normal level. Compared with the projections made in december, the median path is about 1 2 percentage point lower this year and next. The median longerrun normal federal funds rate has been revised down as well. In other words, most Committee Participants now expect that achieving economic outcomes similar to those anticipated in december will likely require a somewhat lower path for policy Interest Rates than foreseen at that time. I would like to underscore, however, that the participants projections for the federal funds rate, including the median path, are not a plan for future policy. Policy is not on a preset course. These forecasts represent participants individual assessments of what appropriate policy would be given each persons own current projections of the most likely outcomes for Economic Growth, employment, inflation, and other factors. However, considerable uncertainty attaches to each participants forecasts of economic outcomes. Hence, their assessments of appropriate policy are also uncertain and will change in response to adjustments to the Economic Outlook and associated risks, as was the case between december and now. Also, it is important to note that the Committee Makes its decisions on a meetingbymeeting basis and does not and need not decide on a likely future path for the federal funds rate. Indeed, the future path of policy is necessarily uncertain because the economy will surely evolve in unexpected ways. As we note in our statement, the actual path of the federal funds rate will depend on the Economic Outlook as informed by incoming data. Finally, the committee will continue its policy of reinvesting proceeds from maturing treasury securities and principal payments from agency debt and mortgagebacked securities. As highlighted in our policy statement, we anticipate continuing this policy until normalization of the level of the federal funds rate is well under way. Maintaining our sizable holdings of longerterm securities should help maintain accommodative financial conditions and should reduce the risk that we might have to lower the federal funds rate to zero in the event of a future large adverse shock. Thank you, and ill be happy to take your questions. Madam chair, as you know inflation has gone up the last two months. We had another strong jobs report, the tracking forecast for gdp have returned to 2 and yet the fed stance that while its in the process of what it said it launched in the summer was a process of normalization. To questions about this. Doesnt the fed had a credibility problem in the sense that it says it will do one thing under certain conditions it doesnt into doing . If the Current Conditions are not sufficient for the fed to raise rates, what would those conditions ever look like . Let you start with the question of the feds credibility. And you used the word promises in connection with that. And as i tried to emphasize in my opening statement, the paths that the participants project for the federal funds rate and how it will evolve are not a preset plan or commitment or promise of the committee. Indeed, they are not even, the median should not be interpreted as a committee endorsed forecast. And theres a lot of uncertainty around each participants projection. And they will evolve, those assessments of appropriate policy are completely contingent on each participants forecast of the economy and how economic events will unfold. And they are, of course uncertain, and you should fully expect that forecast for the appropriate path of policy on the part of all participants will evolve over time as shocks, positive or negative, if the economy that alter those forecast. So you have seen a shift this time in both participants assessments of the appropriate path for policy. And as i tried to indicate, i think that largely reflects a somewhat slower projected path for global growth, for growth in the Global Economy outside the united states, and for some type mean in Credit Conditions in the form of an increase in spreads. And those changes in financial conditions and in the path of the Global Economy have induced changes in the assessment of individual participants in what path is appropriate to achieve our objectives. So thats what you see. Thats what you see. Now, i guess youd asked me also what would we need to see to continue raising rates. And i think its worth pointing out here that the committee, most participants do continue to envision that if economic developments unfold as they expect, that further increases in the federal funds rate will prove appropriate over time. Most disciplines anticipate that. And that the pace will be gradual. As i emphasized, most in. Work imperial work attempting to assess what the equilibrium level of the fed funds rate is a level that would be neither expansionary north contractionary, those assessments are quite low at this time. So there is accommodation in the stance of policy. And we do expect over time that neutral right to move up but, you know, we are not positive what the pace of change of that will be over time. But given that the economy is now close to our maximum employment objective, hopefully inflation is moving up by mentioned, as you mentioned, recent readings on inflation have moved up. There may be some, you know, i want to warn that there may be some transitory factors that are influencing that. But certainly our projections are for gradual increase in inflation. And the committee, at least most participants, continue to expect that if we follow along this course that some further adjustments in the federal funds rate will be appropriate but a gradual. Sam fleming from the financial times. Can i just follow up on this inflation point . Because the numbers have been taking up as you said, somewhat at least. We are also at a point would have a quite close to full employment. Is there a risk we are heading for an overshoot in inflation . And is a better, given the greater symmetry, the fed has been flagging up in terms of its inflation target, a greater tolerance for a modest overshoot, especially given the long. Of undershoot that weve been through . I want to make clear that our inflation objective is 2 and we are projecting a move back to 2 , and would not try to engineer an overshoot of inflation, not to compensate for past undershoot, so 2 is our objective. But it is asymmetric objective, and we certainly dont seek to overshoot our objective. But somebody shoots and