December 18, 2013
BBBen S. BernankeDecember 18, 2013 FOMC Press Conference
- The chair said the FOMC participants' central tendency for GDP growth was 2.2 to 2.3 percent for 2013, rising to 2.8 to 3.2 percent for 2014, with similar estimates for 2015 and 2016.
- The chair said the central tendency of the unemployment rate projections was 6.3 to 6.6 percent in the fourth quarter of 2014 and 5.3 to 5.8 percent by the final quarter of 2016.
- The chair said 15 of 17 FOMC participants did not expect a rate increase before 2015, and the median projection for the federal funds rate was 75 basis points at the end of 2015 and 1.75 percent at the end of 2016.
- The chair said the economy had added about 2.9 million jobs since the current asset purchase program began in September 2012, and the unemployment rate had fallen by more than a percentage point to 7 percent.
- The chair said the FOMC's longer-run normal unemployment rate was estimated to be between 5.2 and 5.8 percent.
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, starting next month, to modestly reduce the pace at which it is increasing the size of the Federal Reserve’s balance sheet. The Committee also clarified its guidance on interest rates, emphasizing that the current near -zero range for the federal funds rate target likely will remain appropriate well past the time that the unemployment rate declines below 6½ percent, especially if projected inflation continues to run below the Committee’s 2 percent longer -run goal.
Today’s policy actions reflect the Committee’s assessment that the economy is continuing to make progress, but that it also has much farther to travel before conditions can be judged normal. Notably, despite significant fiscal headwinds, the economy has been expanding at a moderate pace, and we expect that growth will pick up somewhat in coming quarters, helped by highly accommodative monetary policy and waning fiscal drag. The job market has continued to improve, with the unemployment rate having declined further. At the same time, the recover y clearly remains far from complete, with unemployment still elevated and with both underemployment and long-term unemployment still major concerns. We have also seen ongoing declines in labor force participation, which likely reflect not only longer-term influences, such as the aging of the population, but also discouragement on the part of potential workers.
Inflation has been running below the Committee’s longer -run objective of 2 percent. The Committee recognizes that inflation persistently below its objective could pose risks to economic performance and is monitoring inflation developments carefully for evidence that inflation will move back toward its objective over time.