June 18, 2014
Statement·Presser·Minutes·Policy
JYJanet L. YellenJune 18, 2014 FOMC Press Conference
- The unemployment rate stood at 6.3 percent, four-tenths lower than at the March meeting, and the broader U-6 measure had fallen by a similar amount.
- The central tendency of FOMC participants' projections for the unemployment rate at the end of 2014 was 6.0 to 6.1 percent, slightly lower than in March.
- The central tendency of real GDP growth projections for 2014 was 2.1 to 2.3 percent, down notably from March, largely due to the unexpected first-quarter contraction.
- The central tendency of inflation projections was 1.5 to 1.7 percent in 2014, rising to 1.6 to 2 percent in 2016.
- The FOMC's discussions on normalizing monetary policy were not a signal of imminent change, but prudent planning, with additional details expected later this year.
From the opening statement
Press conference
CHAIR YELLEN. Good afternoon. The Federal Open Market Committee concluded its June meeting earlier today. As was indicated in our policy statement, the Committee decided to make another modest reduction in the pace of its purchases of longer-term securities. The Committee maintained its forward guidance regarding the federal funds rate target and reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate.
Today’s policy actions reflect the Committee’s assessment that the economy is continuing to make progress toward our objectives of maximum employment and price stability. In the l abor market, conditions have improved further. The unemployment rate, at 6.3 percent, is four-tenths lower than at the time of our March meeting, and the broader U -6 measure— which includes marginally attached workers and those working part time but preferring full-time work—has fallen by a similar amount. Even given these declines, however, unemployment remains elevated, and a broader assessment of indicators suggests that underutilization in the labor market remains significant.
Although real GDP declined in the first quarter, this decline appears to have resulted mainly from transitory factors. Private domestic final demand—that is, spending by domestic households and businesses—continued to expand in the first quarter, and the limited set of indicators of spending and production in the second quarter have picked up. The Committee thus believes that economic activity is rebounding in the current quarter and will continue to expand at a moderate pace thereafter. Overall, the Committee continues to see sufficient underlying strength in the economy to support ongoing improvement in the labor market.