here is peter cook. >> a lot to go through in the statement. multiple press releases here, including an exit strategy. the statement that it does not include any major changes. you look at the forecast for where it rate -- where the interest rates are going. there is a contradiction that policymakers do see rates at a higher level at the end of 2016 than they had previously. a separate statement on the exit strategy. other technical data to go through as well. in the statement itself, bond buying will come to an end, according to the fed. his incoming information broadly supports the expectation of ongoing improvement in labor

market conditions and inflation moving back toward the longer run objective, the committee will and its current program of asset purchases at its next meeting. they are not at a preset course. based it goes on to say on the assessment of the factors, it is likely it will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase rogue ram ends. the line remains in there as well. a lot of speculation as to whether or not the fed will remove the guidance. the committee currently anticipates even after inflation , economic conditions may warrant keeping a rate for low levels viewed as normal in the long run. the economy,o there is new language and new concerns about inflation. but first of all, since the committee met in july, the economic information received is atts economic activity

a moderate pace, on balance. the unemployment rate is little indicatorsa range of that suggest there remains significant underutilization of labor resources. that language again remains in the statement. inflation languages new. it has been running below projected. expectations have remained stable. low inflation is still on the fed's radar. two dissents. he did not like the considerable time language in here. richard fisher, he believes continued strengthening of the real economy improves outlook for labor utilization engine -- and rice stability. likely an earlier reduction will be warranted than is suggested by the committee's stated forward guidance. two dissents over forward guidance. let me walk you through again the forecast. i will have to hold this up so people can see it. hopefully, you have got an on-screen.

believe policymakers -- theirst interest in first interest rates, 17 policymakers total, we do not know who these are. separately, down here, more portly, this is where fed policymakers believe the fed funds rate will be at the end of the calendar year. 2015, the median figure was him -- 1.13%. dan -- janet yellen will have to explain why the numbers are creeping up and does it reflect outliers, or is the consensus view still consistent with what we saw in june. just to tell you, interest on excess reserves, we know separately, we use it as the repo facility.

proceeds from the vents bond holdings will only end after the interest rate starts to acquire. the federal make economic contingents to determine if the reinvesting should come to a close. a lot for janet yellen to consider. >> all right. peter cook, thank you. let's get quick reaction from our senior markets correspondent. julie hyman, the market has fallen right now. >> they are right now but that is an important distinction. now they're coming down. takes time for investors to look at the statement trying to figure out exactly what it all means. have the s&p 500. and thene spike up sharp movement downward. it is a sharp movement downward, left s&p 500 is down about a quarter of 1%. that is a caveat as people try

to figure out, is is more of a dovish or a hawkish statement. what is the direction of rates here? treasure markets, sometimes, we get a little bit of a different read there. it seems consistent on what we are seeing there is not. the yield is rising 2.6%. in this and that -- in this environment, the rates going higher is typically negative for equities. that is what we are seeing at the moment. this snapshot in time mark could nextetty volatile over the 30-60 minutes. >> julie hyman, thank you so much. let us get back to our roundtable for post-fed reaction from los angeles. the chief economist of alternative investments, here with me in new york, credit suisse director of u.s. rates strategy, michael mckee, and lisa abramowicz who covers the debt market for bloomberg news. let me start with you. is it dovish or hawkish?

>> hawkish statement, not only they are looking at the economy as improving, but you get two dissents, which shows the committee much more publicly divided. and then you look at the chart. not only did more people suggest they wanted to raise rates in 2015, moving over from 2016, but the median moves up significantly. it was one point 125% in the june meeting. now it is one point 375, which implies two things. that is the median rate at the end of 2015. interest rates will be higher. do that, if you do it on a smooth guide cap thomas you have got to start early. >> there are two interesting things. as mike mentioned, the market immediately started the price for faster hikes. a five-year sector and the three-year sector of the bond market started to sell off. the ten-year sector unchanged on

the day. the fed put out some guidance afterwards and change the way it is doing its reverse repo and other financial institutions. they said originally it was going to be the backup tool to reserves. they are now saying they will use it as needed. that is very important. in our opinion, the repo tools should really be the primary tool and it will be the one that will help them control interest rates, which has been a real problem since the crisis. >> what is your take away? wes what remains to be seen and what will matter to the risk market will be exactly what was behind the celebration an increase in the fed funds rate. is it because they saw an increase in economic growth, or is this because of inflation concerns not related necessarily to strengthening economy and the result of monetary stimulus? that will be important to see.

>> constance, talk to me about nuance and the language. what did you take away? >> my take away is what they said about inflation. they said the likelihood of running below 2% is somewhat diminished since the last meeting. that is the important thing to focus on. if i could die that back to the data this morning on a different inflation member -- measure, which showed what fell is energy prices, and that is more stimulative for the economy. it means households have more disposable income to spend on other services other than energy. do not view the cpi print this morning as necessarily dovish. it supports what the fed is saying in their statement. >> let me ask you, when we go to janet yellen at her press conference at the bottom of the hour, does she have explaining to do? >> she does. she will have to say, here is stops wherethe 2017

they are, and we have to display in the changes in the 2016 numbers. they did move up. was it because people think there is a better outlook? risksll also note some and the global economy. >> the worst-case scenario is them increasing or accelerating the hiking of fed funds rate without the underlying economic improvement, just because they are concerned about a threat to financial stability. the biggest things as they are looking for an excuse and they know they will only have a short window to do that or they wind up having a couple of data print before they say, there is no way they can hike. i think they would like to do it as soon as they can, practically, without destroying the markets. >> lisa made the point before this is an was announced, a lot of people in the markets are saying, the heck with the statement. we will just watch the data. that was an explicit target today when they talked about

their decision to start raising rates. will be based on their assessment of projects realized toward the objectives of maximum employment and inflation. the assessment will take into account a wide range of information, including measures of labor market conditions, indicators of condition pressures, and expectations and readings on financial development. we will look at the data, which tells me his crew should be looking at the data as well. about the data and the timing of the interest rate hike. will this be independent of the data or will it be more contingent upon whether or not the inflation is still at they? >> that is continued data. we will look at a bunch of data. inflation data but also the labor market data. if i could highlight something mentioned earlier, the language

was they will keep rates below levels they would sooner normal. there was a big space between the zero bound and level they consider normal. they can raise the fed funds rate. i think that is an important thing to keep in mind when we look at what they're probably going to do next year. that corresponds well with what we see. >> we will continue our conversation and be back with more roundtable discussion with the fed. we are standing by for janet yellen's conference. ♪

>> our senior markets correspondent julie hyman is also standing by with details. let me start with you. we were talking during the commercial break about reverse repos in the new york fed. what is going on? what's the federal reserve is a $30 billion instead of $10 billion. that is meaningful because there would be concern there crowding out of other types of short term financing with money market mutual funds being able to go to the fed. you have seen that in the minutes a couple of times from the fed. you heard it in speeches from some of the members. relatively big and meaningful change. they can obviously make the limit go back down to 10 billion. maybe this is just testing and they have other tests they are still doing. it is interesting they put out the exit strategy now, while

they are waiting for some of the test. >> they give us an exit strategy, which basically confirms what july minutes said they planned to do. the market is basically irrelevant at the moment with $4 trillion at the balance sheet. it isn't -- in essence to set a floor under it here there have been concerns about how it would function. they note in here they would use it only to the extent necessary and will phase it out when it is no longer needed to help control the federal funds rate. invited to the party for a short toe, and then will be told take their hats and go. >> presumably, they will do that by limiting how big the participation will be. >> the other thing they say in a statement that everyone has them wanting to know is re-investments. they take the proceeds for

the originalonds plan under ben bernanke was to stop investing the money. they will not stop the reinvestments until sometime after they raise rates. >> they are responding but it is not on the charts here it there are pretty significant changes made and this shows me they are trying to fine-tune their language carefully and telegraph things and perhaps that is what they were doing. curves, or at vote to your interest rates will be two years from now, those all move higher and they should have because of what they did in the summary of economics protections . on the reinvestment, what is interesting is from a financial stability perspective, i do not will let the treasury

portfolio run off for a long time. there are structural changes, too broad of a discussion for right now, but that will be an important aspect of financial stability. >> the federal reserve looks like it moved down the unemployment rate a little bit. they expect inflation to remain tamed. they are not expecting inflation to be runaway. the idea they were hike -- they will hike early does not seem appropriate. graphnow we had the showing the economic projections. what are you taking away from that and what are you seeing? >> the most at risk for revision is the inflation forecast. it does not seem to jive terribly well with what is going on in unemployment forecast. we have not seen wage pressers today but we're still looking at 2% year-over-year wage increases. into 2015, the scope

for that number to go up in a lot of different areas of the market. we are seeing labor shortages begin to emerge. so i think this is something we will see a bit of wage pressure into 2014, let's keep our eye on the board -- on the ball in terms of what they say the rate will be. hyman.s get julie she is in the bloomberg data center. what do you have for us? >> stocks are back up again. weant to take it back that tend to see volatility in the wake of the fed statement. anything could change once janet yellen begins speaking. but the reaction we have seen thus far, to lisa's point, you're not seeing a tapered catcher, even though there is volatility up and down, it could be seen initially as a certain victory for the fed. what the fed does not want to see is a big, dramatic, positive

or negative reaction in reaction to the statement coming out, to some of the small tweaks they have made. they want to say the course in terms of the direction of markets. we are seeing that on the bond side as well. yields, the 10t is holding steady around 2.59 and 2.6%. >> all right, julie, thank you so much. michael mckee, you have been feverishly poring over your bloomberg terminal. >> i will take the words out of janet yellen's mouth. do not pay a whole lot of attention to the chart. a number reasons to do that. the personnel has changed. the forecast we all look at is the median forecast. we do not know which is which. she could get a bottom and say, none of this matters because my vote counts the most. if you take them at their word, literally, that they moved up 1.4%, and to almost

you back that out into 25 basis points a meeting, to do that, you have to start in april, moving the fed funds rate up. they started the year by saying it would be in the fall. they then suggested it might be in the summer. they're looking now at an april start. you divided into the number and they have artie told us, 25 basis points is the first move. they will have to be reasonably aggressive to get to that meeting. >> another interesting thing my colleague pointed out, it is not in corners anymore. it is telling because we had all thought they would try to harmonize the repo rate. they're trying to get the federal funds effectively in line. they will not do that anymore. 25 basis points from here is really the first. >> lisa, let me get you in row click. julie was just talking about the bond market reaction.

>> honestly, the market was expecting a lot of what she said. the statement was kind of communing with the market and their angst over the data. they were trying to say, we are in the conversation with you. >> we are ready to go. thank you. thank you all so much. when we come back, we will get another on the markets check. remember, we are standing by for janet yellen's news conference. lies new york time when this special edition continues in just a moment. ♪

>> welcome back. the federal reserve will keep interest rates at zero for a

considerable time after asset rates are completed, saying the economy is at a moderate place and inflation at -- is at its goal. is on the bloomberg markets. here once again is our senior market scores on a, julie hyman. >> thanks so much. let's take a check at where stocks are trading. the s&p and the dow are still hanging onto gains. the read seems to be that this statement here is relatively wish, that the fed still has concerns about what is going on with the economy. i saw a note from the strategists that the stock market seems to be pay attention to the statement and the bond markets easily paying attention to the interest rate forecast. at least initially they were. we were seeing a little increase in rates. everything could change once janet yellen begins speaking. i want to quickly look at the dollar as well. we are their seeing a very little bit of strength thing

against a basket of currencies. >> julie hyman. will bringurn, we you janet yellen's news conference. you will see it live at 2:30 washed in time when this special edition continues in a moment. ♪

>> welcome back to our special coverage of the fed decision on interest rate and statement. i'm mark crumpton in new york. janet yellen will address the press in washington. let's go there live on bloomberg television. >> good afternoon. the federal open market committee concluded its meeting usual, today, and as released its monetary policy statement. the committee also released a document describing the approach the committee intends to take

when at some point in the future it becomes appropriate to begin normalizing the stance of policy. me underscore that our release of information is not meant to convey any change in the stance of policy. as you know, the fomc's views on policies are conveyed in the policy statement, which i will now discuss before coming back to our normalization plans. as indicated in the policy statement, the fomc decided to make another reduction in the pace of its asset purchases. the committee also maintained its forward guidance, regarding the funder -- the federal funds rate target, and reaffirmed its view to the highly accommodative if policy remains appropriate. let me discuss the economic conditions that underpin these actions. to economy is continuing

make progress toward the fomc's objective of maximum sustainable employment. in the labor market, conditions have improved further in recent jobhs, although the pace of growth has slowed some recently. job gains have averaged more than 200,000 per month in the past few months. the unemployment rate was 6.1% in august, 2/10 lower than the time ofilable at the the june fomc meeting. the measures of market utilization, such as the use sixth measure, have shown similar improvement and the labor force participation rate has flattened out. these development continue to trend of gradual projects -- progress toward our labor objective. but the labor market has yet to fully cover.

there are still too many people who want jobs and cannot find them. there are too many who are working part-time, but would prefer full-time work, and too many who are not searching for a job, but would be if the labor market was stronger. as noted in the fomc statement, a range of labor market theretors suggests that remains significant underutilization of labor resources. seecommittee continues to sufficient underlying strength in the economy to support ongoing improvement in the labor market. anhough real gdp rose at annual rate of only about 1% in the first half of the year, that modest gain reflected in part transitory factors, including a dip in net exports. domestic final

demand, that is, spending by domestic households and businesses, grew about twice as fast as gdp. indicators in spending and production for the third quarter suggests economic activity is expanding at a moderate pace. and the committee continues to expect a moderate pace of growth going forward. inflation has been running below the committee's 2% ejecta. -- objective. but with longer-term inflation expectations appearing to be well anchored, and economic recovery continuing, the committee expects inflation to move gradually back to its objective. moreover, it inflation has firmed some since earlier in the year, and the committee believes that the likelihood of inflation running persistently below 2% has diminished. as is always the case, the committee will continue to assess incoming data carefully to ensure its policy is

consistent with maintaining the fomc's longer run goals of maximum employment and inflation of 2%. this outlook is reflected in the individual economic projections submitted in conjunction with this meeting by the fomc participants, which for the first time goes through 2017. as always, each participant projections are commission on his or her own view of appropriate monetary policy. the central tendency of the unemployment rate projections is slightly wrote -- slightly lower than in the june projections, and that stands at 5.9% to 6.0% at the end of this year. generallyparticipants see the unemployment rate declined to its longer run normal level over the course of 2016, and edging a bit below

that level in 2017. the central tendency of the projections for real gdp growth for 2014,cent to 2.2% down slightly from the june projections. years, thext three projections for real gdp growth run somewhat above the estimate of longer than normal growth. finally, fomc participants can continue to see -- continue to see inflation moving back gradually toward 2%. the tendency of inflation projections is 1.5% to 1.7% in in7, rising to 1.9% to 2% 2017. as i noted earlier, the committee decided to make another reduction in the pace of asset purchases.

two years ago when fomc began this purchase program, the unemployment rate stood at 8.1%. and progress in lowering it was expected to be much lower than desired -- slower than desired without additional accommodation. the intent of the program was to achieve a substantial improvement in the outlook of the labor market and to ensure inflation was moving back toward the committee's longer run goal of 2%. in light of the cumulative ingress toward that maximum the labor market since the beginning of the program, and progress the minutes somewhat, we have reduced our purchases again at the -- at this meeting. starting next month, we will be per month,16 billion

down 10 billion per month from the current rate. this supports the committee's expectation of ongoing improvement in the labor market and inflation moving back over time to its 2% longer run objective. the committee will end this program at our next meeting if it stays on schedule. the committee will continue investing proceeds for maturing securities and principal holdings for debt and nds. the committee's sizable holdings of longer-term securities should help maintain a common financial furthern and bring us toward the objective of maximum inflation of 2%. rates, thenterest committee reaffirmed its forward guidance, that it will likely be appropriate to maintain the

current target range for the federal funds rate for a considerable time after the .sset purchase program ends especially if projected inflation continues to run below the committee's 2% longer run goal, and longer-term inflation expectations remain well anchored. this judgment is based on the committee's assessment of real --e and expected progress realized and expected progress toward the maximum 2% inflation. an assessment that is based on a wide range of information, conditions,rket indicators of inflation pressures, and inflation expectations, and readings on financial developments. we begin to remove policy accommodation, it is the committee's current assessment that even after employment and inflation are near mandate conditionslevels,

were not keeping the target federal funds rate below levels that the committee views are lower in the longer run. iss guide and -- guidance consistent with the appropriate policy as reported in the projections. as i will explain in a moment, the fomc now anticipate it will continue to establish the target range, rather than a single point for the federal funds rate when the normalization begins. and the dots in the chart i have distributed now show for each participant the midpoint of this target range. notably, although the central tendency of the unemployment 2016 is slightly below its estimated long-run value. and the central tendency for inflation is close to our 2% objective.

the median projection for the federal funds rate at the end of nearly a.9% remains percentage point below the so,-run value of 3.75% or projected by most participants. although fomc participants provide a number of explanations for the federal funds rate running below its longer run normal level at that time, many the the residual -- cite residual effects of the financial crisis, which although are diminishing, will likely continue to constrain household spending, constrained credit availability, and depressed expectations for future growth and output incomes. as these factors dissipate further, most participants expect the federal funds rate to move close to its longer run normal level by the end of 2017.

thate reiterate however the committee's expectations for the past of the federal funds the federal of funds rate are contingent on the economic outlook. if the economy proves to be stronger than anticipated by the committee, resulting in the more rapid convergence of employment and the fomc's objectives, the increases in the federal funds rate are likely to occur sooner and to be more rapid than in currently -- than currently envisaged. economicrsely, if standards disappointed, increases in the federal funds rate are likely to take place later and be more gradual. to our statement on policy normalization principles and plans. intended tot is provide information to the public about the eventual normalization process. a change insignal

the current or future stance of monetary policy. settingways the case in policy, the fomc will determine the timing and pace of policy so as to promote a statutory mandate of vacuum employment and price stability. since the crisis, the federal reserve has been providing extra dairy accommodation -- extraordinary accommodation using nontraditional terms of monetary policy. the fomc's attention -- intention has always been to return to a more traditional drought this time, the committee has been preparing for a normalization process. in june, 2011, the committee set out some broad and bowls and more -- broad principles and more specific tactics for how a normalization process should

take place. in june, 2013, we noted the conditions had changed significantly in ways not anticipated in june of 2011. including the size and composition of the fed's balance ofet and its summary vision -- and that summary vision of those earlier plans was appropriate. the document released today reflects our updated plans, which readers of our minutes will know has been under discussion for the last few fomc meetings. approach retains many broad objectives and principles from the original, but also has some new elements. as was the case before the crisis, the committee intends to adjust the stance of monetary policy during the normalization primarily through actions that influence the level of the federal funds rate and other short-term interest rates, not to active management -- not

through active management of the balance sheet. the federal funds rate will serve as the key rate to communicate the stance of policy. to begin normalization, the committee will raise its target range for the federal funds rate. the committee expects that the effective federal funds rate may vary within the target range and could even move outside of that range on occasion. but such movement should have no material effect on financial conditions or the broader economy. tool for moving the federal funds rate into the target range will be the rate of interest paid on excess reserves . that thettee expects federal funds rate will create a rate, while so plentiful, as is the case at present. the committee also intend to use

an overnight repurchase agreement facility, which by acting with the broad counterparties will help ensure that the federal funds rate remains in the target range. i would like to emphasize that rp facilityht or will be phased out when no longer needed to help control the federal funds rate. in addition, the committee will adjust the particular savings of these tools as needed, and could deploy other supplementary tools ourell to ensure we achieve desired stance of policy. turning now to our plans regarding the fed's balance the committee intends to reduce security holdings in a gradual and printable manner -- predictable manner, primarily by seeking to reinvest on payments

of principal with the open market account. regarding the time and -- timing for investment, the committee now expects this to occur after the initial increase in the target range for the federal funds rate. the committee currently does not anticipate selling agency mortgage-backed securities as part of the normalization process. although limited sales might be warranted in the longer run to reduce or eliminate residual holdings. of suchng and pace sales will be too indicated to the public in advance. it is the committee's intention that the federal reserve will in the longer run hold no more securities than necessary. efficientetary policy and effective, and that these securities will primarily sing -- primarily exist of

securities. way intendedn no to change the stance of monetary policy. rather, it is made simply to provide information about how the committee envisions the lightization process in of the changes in economic and financial circumstances that have occurred since we put forth our original plans more than three years ago. with that said, conditions could change further and we will learn about our tools during normalization. it ismmittee has agreed prepared to make additional adjustments to its normalization plans if warranted by economic and financial developments. thank you. let me stop there. i will be happy to take your questions.

>> thank you. chair yellen, there was some debate going into this meeting about the phrase "considerable time" in the statement. was it debated at the fomc as to whether or not it should be incomplete ash should be -- whether or not it should be included? -- ae statement of forward form of forward guidance? and finally, how do you square this idea of a date when you any others at the fomc have continually said that you are dated a pendant, to the point where -- data dependent, to the point where if the data were to turn, would that not be sufficient to raise rates? >> of course, the committee discussed it forward guidance today, and it discusses what the appropriate forward guidance is at every meeting. our assessment

of economic conditions and the important stance of monetary policy. in terms of what the term thesiderable time" means, committee decided that based on its assessment of economic conditions, that characterization remains appropriate and it was comfortable with it. at thelook, for example, projections of individual in thepants revealed sep, the view of each participant -- again, i would emphasize it is each participant and not the committee collective view -- there is relatively little change in the assessment in the outlook by participants between this meeting and the assessment in june. the outlook is little changed. klein in the

anticipated path of the unemployment rate -- a slight decline in the anticipated path of the and aplomb and rate, and a slight projection up. the outlook has not changed that much from june, and the committee felt comfortable with this characterization. said, is in this -- idar-based guidance want to emphasize that there is no mechanical interpretation of what the term "into durable time" means. " means.iderable time and i have made multiple determinesthat what the raising of the federal funds rate is dated attempt -- data dependent. now i will emphasize something i said previously, which is that

if the pace of progress and achieving our goals were to quicken, if it were to likely thatit is the committee will begin raising its target for the federal funds .ate if that is anticipated, then we might raise the federal funds rate at the -- at a faster pace. and the opposite is also true if the projection were to change. there is no fix, mechanical interpretation of a timeframe. not be accurate to describe the committee's guidance about the timing of the federal funds rate and when it will move above zero as being calendar-based. the committee has started with a broad, general statement of what determines how long it will keep the federal funds rate target at zero. it will be looking

at the actual and projected pace ourhich the gaps between employment and inflation and our goals for these variables are closing. and then what the committee does is, after seeing that the assessment will take into account many different indicators and take into account inflation pressures and other things, it goes on to provide at that meeting its assessment of the implications of its view of the data at that time. that assessment really has not changed over the last several meetings. committee, based on its assessment at each meeting, has felt comfortable saying that based on its assessment of those ittors, it considers that will likely be appropriate to maintain the current target range for a considerable time

after the asset purchase program inflationcially if remains below the 2% objective. as --d not describe that i know considerable time sounds like it is a calendar concept, but it is highly conditional in its length -- in its link to the committee's assessment of the economy. >> howard schneider with reuters. thank you. if you would help us square the circle little bit, because having kept the guidance the same, having a significant underutilization of labor, having actually pushed gdp projections down a little bit, yet the rate pass gets steeper and seems to be consolidating higher. dependent, what accounts for the faster projections on rate increases if the data are not moving in that direction? the close projections for

2014 are down a little bit, but the employee path is also marginally lower. projected path of the and unemployment and other majors -- measures of is partlymarket dependent on the growth outlook, it is not totally dependent on the growth outlook. as the committee assesses that the labor market is continuing to improve and ucf small reduction in the past of the items -- past -- and you see a small reduction in the path of the labor market for the projected time frame. you asked me why the projected funds rate has moved up. well, each participant knows why they wrote down what they did, but i would guess as a first hazard, i would say there is

relatively little movement in the upward path. i would view it as broadly in line with what one would expect with a very small, downward reduction in the past four -- or unemployment and a small change for inflation. most participants look at, as our guidance says, how large the gap is between performance of , and thatmarket associated with our maximum employment objective. how large is the gap between inflation and our 2% objective? thingst will those change echo and very modest reductions in the size of those -- how fast were those things change? and you see a very modest reduction in the size of those things. a very small change of a

slightly faster pace. i would describe the change in the projections before the the path with rates as quite modest. but the fact that they move does illustrate the principle of data dependent, which i think is so important for market participants to keep in mind, that what we will do will depend on how the data unfolds. there is uncertainty about that. and as expectations and the actual performance of the economy changes, you should expect to see movement in the dots. it is also notable that the further you go out in the projection timeframe, the wider a set of dots. you see a big range in 2017. and that reflects in part different forecasts by different numbers of the committee about how rapid progress will be. what you don't see in the

the suretyot plot is of each participant around their own projections. it will depend on how the economy evolves. that will change over time. there is a good deal of uncertainty with it. >> chris condon, bloomberg news. thank you, madam chair. the economy has been growing for ite years, and some believe will last another five years. why in your view is economic growth not creating more inflation and wages and in pce? is this all about remaining slack in the labor market? or are there other forces at play? >> to my mind, the very slow

pace of wage increases does reflect slack in the labor market. , asad a very deep recession is perhaps to be expected in the aftermath of a very significant financial crisis. we have faced headwinds in the root -- in the economy recovering. the recovery has been slow. growth has been positive. and it has lasted for five years, but it has nevertheless been slow relative to the past -- to past recoveries that have not been associated with financial crises. comeollin employment has way down from the slightly over 10% level it reached -- and while unemployment has come way down from the slightly over 10% level it reached, it is significantly above the levels that most fomc participants

would regard as consistent with normal in the longer run, 5.2 percent to 5.5%. there is significant underutilization of labor resources. we continue to discuss whether or not the unemployment rate adequate measure ofhow much underutilization labor resources there really is. and as i went into detail in jackson hole, and we repeat all of that there, there are other ways in which we see underutilization. high levels have come down only very marginally of part-time economict, or involuntary part-time employment. portion ofained some forcedor