"Operating Under A Cloud of Uncertainty": Janet Yellen's FOMC Press Conference About Raising the Target Range for Federal Funds Rate to 1/2 to 3/4 %
"On financial regulation we lived through a devastating financial crisis that took a huge toll on our economy. Most members of Congress and the public came away from that experience feeling it was important to take a set of steps that would result in a safer and stronger financial system. I feel that we have done that. That has been our mission since the financial crisis; that's what *Dodd Frank was designed to do."
Janet Yellen, in part at her press conference following the statement of the **Federal Open Market Committee:
'Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been expanding at a moderate pace since mid-year. Job gains have been solid in recent months and the unemployment rate has declined. Household spending has been rising moderately but business fixed investment has remained soft. Inflation has increased since earlier this year but is still below the Committee's 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation have moved up considerably but still are low; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will strengthen somewhat further. Inflation is expected to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further. Near-term risks to the economic outlook appear roughly balanced. The Committee continues to closely monitor inflation indicators and global economic and financial developments.
In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1/2 to 3/4 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a return to 2 percent inflation.
The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee’s holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.
Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; James Bullard; Stanley Fischer; Esther L. George; Loretta J. Mester; Jerome H. Powell; Eric Rosengren; and Daniel K. Tarullo.
*Dodd-Frank Act: CNBC Explains: The term Dodd-Frank refers to a comprehensive and complicated piece of financial regulation born out of the Great Recession of 2008.
Trump Team Promises To 'Dismantle' Dodd-Frank Bank Regulations ... www.npr.org/.../trump-team-promises-to-dismantle-dodd-frank-bank-regulations
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