June 14, 2017
Statement·Presser·Minutes·Policy
JYJanet L. YellenJune 14, 2017 FOMC Press Conference
- The chair said the FOMC's decision to raise rates reflects progress toward maximum employment and price stability, and that the stance of policy remains accommodative.
- The chair noted that job gains have averaged about 160,000 per month since the start of the year, a solid rate well above the pace needed to absorb new labor force entrants.
- The chair explained that recent low inflation readings were driven significantly by one-off price declines in categories like wireless telephone services and prescription drugs, which will restrain 12-month inflation until the low March reading drops out.
- The chair stated that the median projection for the federal funds rate is 1.4 percent at the end of this year, 2.1 percent at the end of next year, and 2.9 percent at the end of 2019.
- The chair said the balance sheet normalization caps will initially be $6 billion per month for Treasuries and $4 billion per month for agencies, rising gradually to $30 billion and $20 billion, respectively, over a year.
From the opening statement
Press conference
CHAIR YELLEN. Good afternoon. Before I get started, I just want to say that our thoughts are with those who were injured this morning.
Today the Federal Open Market Committee decided to raise the target range for the federal funds rate by ¼ percentage point, bringing it to 1 to 1¼ percent. Our decision to make another gradual reduction in the amount of policy accommodation reflects the progress the economy has made, and is expected to make, toward maximum employment and price stability objectives assigned to us by law.
We also released today, as an addendum to our Policy Normalization Principles and Plans, additional information on the process that we will follow in normalizing the size of our balance sheet once we determine that it is appropriate to begin doing so. I’ll have more to say about our interest rate decision and our balance sheet policy, but first I’ll review recent economic developments and the outlook.