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You can find the current article at its original source at https://www.theguardian.com/business/live/2016/sep/21/bank-of-japan-stimulus-programme-federal-reserve-business-live
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| Version 20 | Version 21 |
|---|---|
| Federal Reserve leaves US interest rates on hold – live updates | Federal Reserve leaves US interest rates on hold – live updates |
| (35 minutes later) | |
| 8.08pm BST | |
| 20:08 | |
| Q: Is there a risk in leaving interest rates too low for too long? | |
| Yes, Yellen replies. But the bigger risk is to raise rates too soon. | |
| We could cause a recession in the process - that isn’t something that I and my colleagues want to be responsible for. | |
| * FED's Yellen says there are risks in waiting too long to raise rates - RTRS | |
| * FED's Yellen says risk that FED would need to tighten policy too quickly if wait to long to raise rates again - RTRS | |
| 8.05pm BST | |
| 20:05 | |
| Q: Why did the Fed cite the Brexit vote as a key risk back in June, but hasn’t cited the November elections as a risk today? | |
| Yellen won’t be tempted with this curveball, saying simply that she won’t comment on the US election. | |
| 8.03pm BST | |
| 20:03 | |
| Two political questions... | |
| Q: Is political uncertainty weighing on US growth, in the run-up to November’s election? | |
| Yellen says that investment spending has been weak recently, but she isn’t exactly sure why. | |
| Consumer sentiment is “perfectly solid”, though. | |
| Q: Does the Fed want government spending to take more of the strain? | |
| There are ways that fiscal policy could help, Yellen replies, especially though ‘automatic stabilisers’ which would kick in during a slowdown. | |
| 7.55pm BST | |
| 19:55 | |
| Q: Could interest rates rise at the next meeting, in November? | |
| Yellen confirms that the November meeting is ‘live’. | |
| 7.55pm BST | |
| 19:55 | |
| Yellen rejects Trump's criticism over rate policy | |
| A zinger of a question: | |
| Q: Donald Trump claims that the Federal Reserve has kept interest rates artifially low for political reasons. What’s your response? | |
| Yellen tries to sweeps the Republican presidential nominee’s criticism aside. | |
| I can say emphatically that political issues play no part in the path of monetary policy, she insists. | |
| We do not discuss politics at our meetings, and we do not take politics into account in our decisions. | |
| 7.52pm BST | |
| 19:52 | |
| Q: Is the Fed’s credibility being hurt by the different briefings we’ve heard from policymakers, with some hinting at rate hikes and others much more dovish? | |
| Yellen says there is less disagreement within the FOMC than you might think from recent speeches and comments. | |
| We do not suffer from “group think”, she adds; we are debating the issues around when to raise interest rates. | |
| #FED YELLEN: MOST COLLEAGUES AGREE CASE FOR HIKE HAS STRENGTHENED - MNI | |
| 7.49pm BST | |
| 19:49 | |
| Yellen is repeating her line about how there is a bit more ‘running room’ left in the economy, but an interest rate rise will probably soon be appropriate. | |
| 7.46pm BST | |
| 19:46 | |
| Yellen: No sign that the economy is overheating | |
| Onto questions... | |
| Q: Aren’t you just looking for excuses not to raise interest rates? | |
| We are pleased about the state of the US economy, Janet Yellen replies, citing the steady job creation in recent months. | |
| But people are still coming back into the labour market, she repeats, so there’s no sign of “overheating” | |
| So.... | |
| The economy has a little more room to run than might have been previously thought. We don’t see the economy overheating now. | |
| Yellen: We're generally pleased with how the U.S. economy is doing...Payroll gains in recent months have been solid. | |
| Yellen:"“The labor market does have that potential to have people come back in without having the unemployment rate coming down.” | |
| 7.41pm BST | |
| 19:41 | |
| Yellen argues that US monetary policy stance is currently only “modestly accommodative”. So there is little danger of dropping behind the curve by leaving interest rates on hold today. | |
| Policy is not on a pre-set course, she adds. | |
| And then she argues that by not raising rates too soon, the Fed cuts the risk of having to cut rates in the future. | |
| 7.39pm BST | |
| 19:39 | |
| Yellen asks the question on everyone’s lips - if the US economy is improving, why didn’t they raise the federal fund rate? | |
| She insists that the Fed isn’t worried about an economic slowdown. | |
| Instead, there is still “scope for further improvement in the labour market”. So with inflation below target, the Fed decided to leave rates unchanged and let more data flow in ... | |
| 7.35pm BST | |
| 19:35 | |
| The Fed still expects inflation to rise to 2% in the next two-to-three years, Yellen continues. | |
| But the Fed can’t take it for granted that long-term inflation expectations will remain well-anchored (ie, that American citizens will believe that inflation is actually heading back to target) | |
| 7.34pm BST | 7.34pm BST |
| 19:34 | 19:34 |
| Recent employment data shows that more people are coming back to the labour market looking for jobs, says Yellen. That’s a very encouraging sign - but also means there is still some slack to mop up. | Recent employment data shows that more people are coming back to the labour market looking for jobs, says Yellen. That’s a very encouraging sign - but also means there is still some slack to mop up. |
| 7.32pm BST | 7.32pm BST |
| 19:32 | 19:32 |
| Yellen press conference begins | Yellen press conference begins |
| Janet Yellen is giving a press conference right now! It’s being streamed live here. | Janet Yellen is giving a press conference right now! It’s being streamed live here. |
| The Fed chair confirms that the Fed believes the economy has strengthened, but left rates on hold. | The Fed chair confirms that the Fed believes the economy has strengthened, but left rates on hold. |
| She says household spending has driven growth up, but business investment remains “soft”. | She says household spending has driven growth up, but business investment remains “soft”. |
| 7.28pm BST | 7.28pm BST |
| 19:28 | 19:28 |
| Some snap reaction and analysis: | Some snap reaction and analysis: |
| A divided Federal Reserve left rates unchanged "for the time being." 3 officials dissented in favor of higher rates. https://t.co/U4H58QnQFa | A divided Federal Reserve left rates unchanged "for the time being." 3 officials dissented in favor of higher rates. https://t.co/U4H58QnQFa |
| Yellen's presser sure to see serious verbal gymnastics. Keep market honest, December on the table, yet maintain Fed flexibility. | Yellen's presser sure to see serious verbal gymnastics. Keep market honest, December on the table, yet maintain Fed flexibility. |
| I don't see anythimg hawkish in this #fed | I don't see anythimg hawkish in this #fed |
| Fed explicitly acknowledged of reality by reduction in the long term growth path to 1.8 percent. I'm at 1.5% with downside risk of 1% | Fed explicitly acknowledged of reality by reduction in the long term growth path to 1.8 percent. I'm at 1.5% with downside risk of 1% |
| Median Fed official's estimate for longer-run trend GDP growth has slipped below 2% for the first time (now 1.8%) | Median Fed official's estimate for longer-run trend GDP growth has slipped below 2% for the first time (now 1.8%) |
| 7.26pm BST | 7.26pm BST |
| 19:26 | 19:26 |
| The Fed statement: the key points | The Fed statement: the key points |
| Alhough the Federal Reserve resisted hiking rates, the US central bank does believe that the economic conditions are improving. | Alhough the Federal Reserve resisted hiking rates, the US central bank does believe that the economic conditions are improving. |
| Today’s statement suggests that the economy is in decent-enough shape, but inflation is still too low to justify higher borrowing costs. | Today’s statement suggests that the economy is in decent-enough shape, but inflation is still too low to justify higher borrowing costs. |
| The Fed says: (I’ve bolded-up some parts) | The Fed says: (I’ve bolded-up some parts) |
| Information received since the Federal Open Market Committee met in July indicates that the labor market has continued to strengthen and growth of economic activity has picked up from the modest pace seen in the first half of this year. Although the unemployment rate is little changed in recent months, job gains have been solid, on average. Household spending has been growing strongly but business fixed investment has remained soft. Inflation has continued to run below the Committee’s 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation remain low; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months. | Information received since the Federal Open Market Committee met in July indicates that the labor market has continued to strengthen and growth of economic activity has picked up from the modest pace seen in the first half of this year. Although the unemployment rate is little changed in recent months, job gains have been solid, on average. Household spending has been growing strongly but business fixed investment has remained soft. Inflation has continued to run below the Committee’s 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation remain low; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months. |
| But... | But... |
| Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will strengthen somewhat further. Inflation is expected to remain low in the near term, in part because of earlier declines in energy prices, but to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further. Near-term risks to the economic outlook appear roughly balanced. The Committee continues to closely monitor inflation indicators and global economic and financial developments. | Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will strengthen somewhat further. Inflation is expected to remain low in the near term, in part because of earlier declines in energy prices, but to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further. Near-term risks to the economic outlook appear roughly balanced. The Committee continues to closely monitor inflation indicators and global economic and financial developments. |
| 7.19pm BST | 7.19pm BST |
| 19:19 | 19:19 |
| Wall Street has taken today’s decision in its stride - shares are a little higher, and the dollar has dipped a little. But it’s nothing serious. | Wall Street has taken today’s decision in its stride - shares are a little higher, and the dollar has dipped a little. But it’s nothing serious. |
| Fed reaction. pic.twitter.com/mTC9EgyxSe | Fed reaction. pic.twitter.com/mTC9EgyxSe |