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10 Feb 2016
Yellen - Lower path of the federal funds rate would be appropriate if economy were to disappoint
Fed’s Yellen, in her testimony to congressional committee, said a lower path of federal funds rate would be appropriate if the economy were to disappoint going ahead.
Yellen said, “Financial conditions in the United States have recently become less supportive of growth, with declines broad measures of equity prices, higher borrowing rates for riskier borrowers, and a further appreciation of the dollar."
Key quotes on Inflation
Inflation continues to run below the (FOMC) Committee's 2 percent objective
The low average pace of inflation can be traced to earlier steep declines in oil prices and in the prices of other imported goods
The Committee expects inflation to remain low in the near term
Key Quotes on interest rate
FOMC participants' projections of the appropriate federal funds rate over the next three years generally shifted to lower values
The median projection now stands at 1.4 percent at the end of 2016, 2.4 percent at the end of 2017, and 3.3 percent at the end of 2018
Key Quotes on labor market
Unemployment rate fell to 4.8 percent in January, 0.8 percentage point below its level a year ago
These measures remain above the levels seen prior to the recession, suggesting that some slack in labor markets remains
Key Quotes on global economy
Foreign economic developments, in particular, pose risks to U.S. economic growth
Low commodity prices could trigger financial stresses in commodity -exporting economies
Yellen said, “Financial conditions in the United States have recently become less supportive of growth, with declines broad measures of equity prices, higher borrowing rates for riskier borrowers, and a further appreciation of the dollar."
Key quotes on Inflation
Inflation continues to run below the (FOMC) Committee's 2 percent objective
The low average pace of inflation can be traced to earlier steep declines in oil prices and in the prices of other imported goods
The Committee expects inflation to remain low in the near term
Key Quotes on interest rate
FOMC participants' projections of the appropriate federal funds rate over the next three years generally shifted to lower values
The median projection now stands at 1.4 percent at the end of 2016, 2.4 percent at the end of 2017, and 3.3 percent at the end of 2018
Key Quotes on labor market
Unemployment rate fell to 4.8 percent in January, 0.8 percentage point below its level a year ago
These measures remain above the levels seen prior to the recession, suggesting that some slack in labor markets remains
Key Quotes on global economy
Foreign economic developments, in particular, pose risks to U.S. economic growth
Low commodity prices could trigger financial stresses in commodity -exporting economies