Federal Reserve chair Janet Yellen has begun her press conference.
Economic activity is rebounding in the current quarter and will continue to expand at a modest pace after.
“Unemployment remains elevated and underutilization in the labour market remains significant,” says Yellen.
Inflation is running below the 2% objective, and this could pose risks to economic performance.
The Committee expects inflation to move gradually back towards its objective.
Yellen says a wide range of indicators will trigger rate hikes.
When asked if Fed is behind the curve on inflation, Yellen says, “I think recent readings on CPI index have been a bit on the high side but I think it’s the data we’re seeing is noisy. Broadly speaking inflation is evolving in line with the committee’s expectations.
The Federal Open Market Committee (FOMC) just unveiled its latest monetary policy decision.
As expected it moved to cut its monthly asset purchase program by $US10 billion to $US35 billion. The Fed also kept its interest rate unchanged, though it lowered its GDP forecast.
Despite the recent uptick in inflation, its language on inflation was largely unchanged.
Basically, the Fed sees no urgency on the part of the FOMC to tighten monetary policy by raising rates, even though unemployment has come down dramatically, and inflation is picking up.
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