Highlights from Yellen's opening statement
- Steady unemployment despite more jobs, suggests more people entering workforce
- Measures of slack have shown little change since Jan
- Economy to expand at moderate pace in next few years
- PCE inflation still short of 2% objective, was less than 1% in year through July
- Inflation expectations remain reasonably well-anchored
- Our decision does not reflect lack of economic confidence
- Gradual hikes likely to be sufficient to get to neutral policy over the next few years
- Median forecast revised down quarter-point to half-point in dot plot
- Economic outlook is inherently uncertain
Her point here is that the labor market had more slack in January than they thought because all the new jobs haven't led to a lower unemployment rate or wage inflation.
This Fed slide from Yellen's press conference forecasts some pretty dismal growth in the long term.
