Yellen: 2015 Liftoff May Be Delayed/Sped Up by Unexpected Events
2015-07-10 16:30:00.15 GMT
By Vivien Lou Chen
(Bloomberg) -- Yellen reiterates view that liftoff later
this yr “will be appropriate,” adds that “unanticipated
developments could delay or accelerate this first step” and
economic/inflation outlook “remains highly uncertain.”
* May be appropriate to remove accommodation more
quickly/slowly depending on progress with
employment/inflation, Yellen said in text of speech in
Cleveland
* Yellen makes only one direct reference to Greece, saying
situation “remains unresolved”
* Repeats Fed’s view that it will watch for continuing
improvement in labor mkt, needs reasonable confidence
inflation will return to 2%; pace of normalization will be
gradual, policy will be “highly supportive” “for quite
some time”
* Fundamentals underlying U.S. economy are “solid,” should
lead to “some pickup” in pace of growth in coming yrs
* Moderate growth seen for 2015 as drag from higher USD on
exports, lower crude oil prices eases over rest of yr
* Improving job mkt should support faster pace of household
spending; increases in house/stock prices should also
support spending
* Unemployment rate should decline further
* Lower unemployment rate doesn’t fully capture extent of
labor mkt slack remaining
* Significant number of people are still not seeking work
because of perceived lack of opportunities, stronger
economy would draw some of them back to labor force
* Number of people working part-time, yet preferring full-
time jobs, probably remains higher than it would be in
full-employment economy
* Signal from pace of wage increases isn’t entirely clear;
tentative signs of pickup may indicate full employment “is
coming closer into view”
* Less progress is being made on moving inflation to 2%;
expects inflation to move toward target in next few yrs
* Downward pressures from stronger USD, plunge in oil
prices seem to be abating; effects of these factors
should fall out of inflation measures by early next yr
* Persistent, very low inflation would leave FOMC with
less scope to respond with lower rates
* Some 1Q weakness appears to be transitory; statistical noise
or measurement issues “may have played some role”
* Drag on growth from fiscal policy changes appears to have
waned
* Factors that could hold back growth are restraint in
business investment, housing; housing activity likely to
improve only gradually
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Vivien Lou Chen in San Francisco at +1-415-617-7078 or
vchen1@bloomberg.net
To contact the editors responsible for this story:
James Holloway at +1-212-617-4454 or
jholloway8@bloomberg.net
Vivien Lou Chen
2015-07-10 16:30:00.15 GMT
By Vivien Lou Chen
(Bloomberg) -- Yellen reiterates view that liftoff later
this yr “will be appropriate,” adds that “unanticipated
developments could delay or accelerate this first step” and
economic/inflation outlook “remains highly uncertain.”
* May be appropriate to remove accommodation more
quickly/slowly depending on progress with
employment/inflation, Yellen said in text of speech in
Cleveland
* Yellen makes only one direct reference to Greece, saying
situation “remains unresolved”
* Repeats Fed’s view that it will watch for continuing
improvement in labor mkt, needs reasonable confidence
inflation will return to 2%; pace of normalization will be
gradual, policy will be “highly supportive” “for quite
some time”
* Fundamentals underlying U.S. economy are “solid,” should
lead to “some pickup” in pace of growth in coming yrs
* Moderate growth seen for 2015 as drag from higher USD on
exports, lower crude oil prices eases over rest of yr
* Improving job mkt should support faster pace of household
spending; increases in house/stock prices should also
support spending
* Unemployment rate should decline further
* Lower unemployment rate doesn’t fully capture extent of
labor mkt slack remaining
* Significant number of people are still not seeking work
because of perceived lack of opportunities, stronger
economy would draw some of them back to labor force
* Number of people working part-time, yet preferring full-
time jobs, probably remains higher than it would be in
full-employment economy
* Signal from pace of wage increases isn’t entirely clear;
tentative signs of pickup may indicate full employment “is
coming closer into view”
* Less progress is being made on moving inflation to 2%;
expects inflation to move toward target in next few yrs
* Downward pressures from stronger USD, plunge in oil
prices seem to be abating; effects of these factors
should fall out of inflation measures by early next yr
* Persistent, very low inflation would leave FOMC with
less scope to respond with lower rates
* Some 1Q weakness appears to be transitory; statistical noise
or measurement issues “may have played some role”
* Drag on growth from fiscal policy changes appears to have
waned
* Factors that could hold back growth are restraint in
business investment, housing; housing activity likely to
improve only gradually
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Vivien Lou Chen in San Francisco at +1-415-617-7078 or
vchen1@bloomberg.net
To contact the editors responsible for this story:
James Holloway at +1-212-617-4454 or
jholloway8@bloomberg.net
Vivien Lou Chen