September 18, 2013
BBBen S. BernankeSeptember 18, 2013 FOMC Press Conference
- The chair said the unemployment rate at 7.3 percent remains well above acceptable levels, with long-term unemployment and underemployment still high.
- The chair said the FOMC extended the horizon of its economic projections through 2016 at this meeting.
- The chair said the central tendency of participants' projections for economic growth is 2.0 to 2.3 percent in 2013, rising to 2.9 to 3.1 percent in 2014, and 2.5 to 3.3 percent in 2016.
- The chair said 12 of the 17 participants expect the first federal funds rate increase to occur in 2015, and two expect it in 2016.
- The chair said the median projected federal funds rate is 1 percent at the end of 2015 and 2 percent at the end of 2016, well below the longer-run normal value of 4 percent projected by most participants.
From the opening statement
Press conference
CHAIRMAN BERNANKE. Good afternoon. The Federal Open Market Committee (FOMC) concluded a two-day meeting earlier today. As you already know from our statement, the Committee decided today to keep the target range for the federal funds rate at 0 to ¼ percent and to make no ch ange in either its asset purchase program or its forward guidance regarding the federal funds rate target. I will discuss the rationales for our decision in a moment.
Economic growth has generally been proceeding at a moderate pace, with continued— albeit somewhat uneven —improvement in labor market conditions. Of course, to say that the job market has improved does not imply that current conditions are satisfactory. Notably, at 7.3 percent, the unemployment rate remains well above acceptable levels. Long-term unemployment and underemployment remain high. And we have seen ongoing declines in labor force participation, which likely reflects discouragement on the part of many potential workers as well as longer-term influences, such as the aging of the population.
In the Committee’s assessment, the downside risks to growth have diminished, on net, over the past year, reflecting, among other factors, somewhat better economic and financial conditions in Europe and increased confidence on the part of households and firms in the staying power of the U.S. recovery. However, the tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and the labor market. In addition, federal fiscal policy continues to be an important restraint on growth and a source of downside risk.