Speaks in SF

  • Fed close to dual goals but ccannot give timing of next hike
  • makes sense to gradually reduce monetary policy support
  • US near maxed employment,, inflation moving toward goal
  • inflation running below 2%, maybe more room in job market
  • She is hearing from borrowers who want lower rates
  • She and most colleagues expect a few rate hikes in a year
  • US wage growth remains fairly low
  • wants to ensure economy strong enough to absorb shocks
  • she expects rates to be close to longer run at neutral rate of 3% by the end of 2019
  • Waiting too long to raise rates could force fed to hike aggressively, pushing the economy into recession
  • She estimates 4.75% unemployment rate as equivalent to full employment
  • economy is near maximum employment, inflation is moving towards that 2% goal
  • since December rate hike reflected confidence US economy will continue to iimprove
  • Low productivity growth explains why dramatic rate hikes probably won't be needed

The US dollar is moving to new highs after confident headlines from Chair Yellen The 30 year bond is flirting with 3% up about 7 bp. Gold is down about $13.75 now

The full text of the speech can be found by clicking here.