we've gone back and forth here into positive negative territory all day. so we'll see how the stock market reacts when they get this decision. we also want to see what the growth prediction is going to be in terms of gdp revenue. let's go to peter barnes. >> the fed continues to taper. the fed continue toss taper, cutting bond purchases another $10 billion a month as expected and the fed has changed its guidance when it may begin to increase short-term interest rates as the economy improves, eliminating its 6 1/2% unemployment rate threshold. let's get right to the economic analysis. quote, information received since the federal open market committee met in january indicates that growth in economic activity slowed during the winter months in part reflecting adverse weather conditions. labor market indicators were mixed but on balance showed further improvement. the unemployment rate however remains elevated of the household spending and business fixed investment continue to

advance while the recovery in the housing sector remained slow. fiscal policy is restraining economic growth although the extent of restraint is diminishing, inflation has been running below the committee's longer run objective but inflation, longer term inflation expectations have remained stable. skipping over some, some redundant language, quote, the committee currently judges there is sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions. in light of the cumulative progress towards maximum employment and the improvement in the outlook for labor market conditions since the inception of the current asset purchase program, the quantitative easing, the committee decided to make a further measured reduction in the pace of its asset purchases to 55 billion a month from 65 billion previously. it also repeats some other language here from its january statement. so i will skip ahead to the new guidance on fed fund rates,

short-term interest rates. quote, in determining how long to maintain the zero to quarter percent target rate for the federal fund target range for the federal fund rate the committee will assess progress, both realized and expected towards its objectives of maximum employment and 2% inflation. this assessment will take into account a wide range of information including measures of labor market conditions, indicators of inflation pressures and inflation expectations and readings on financial developments. the committee continues to anticipate based on its assessment of these factors that it will likely be appropriate to maintain the current target range for the federal fund rate for a considerable time after the asset purchase program end especially if projected inflation continues to run below the committee's 2% longer run goal and, skipping ahead again, the committee, quote, the committee currently anticipate that is even after employment and inflation are near

mandate-consistent levels, economic conditions may for some time warrant keeping the target federal funds rate below levels the committee views as normal in the longer run. the vote for this policy today, 8-1, with the president of the federal reserve bank of minnesota, coach coach kocherlakota, dissenting that he is concerned this new policy will weaken the fed's commitment to getting inflation back to its 2% target. melissa. melissa: the headlines out of there, the fed is tapering another 10 billion. the another big news out of there, taking out language, threshold of 6.5% unemployment. that was somewhat expected. very interesting to hear that in there. before we bring in our panel for reaction i want to look at what the market is doing. we have james romelli. this is a big deal. gdp growth projection for 2014, they have lowered the bar and

see growth at 2.9%. before it was 3%. unemployment rate projection from 6.5% to they think saying that unemployment will be 6.2%. that is the important data. james is at the cme. james, what do what do you thine trade in light of that? >> initially we saw markets tick lower. s&p futures fell by a couple handles and i'm not surprised to see that happen. generally we see some very choppy price action in moments immediately following the release. this price action need to be taken with a grain of salt. we see institutions come in with algorthymic traders. once the market calms down we should see the trend move in and move on to the close. i think the market probably heads higher here. this is exactly what we were expecting today. melissa: absolutely. steve forbes, let me get your reaction. >> this is expected and somewhat disappointing. the fed still has the notion they could guide the economy. melissa: they tapered more.

>> they're not bleeding patient as much but they're guilty of economic malpractice. melissa: strong words. do you agree with that. >> i agree with steve. had we gotten more cut in amount of money printed every month i think market would respond more postively. the market is saying if we don't expand the printing of money as much, if we cut back on the printing, the market goes up. because it's a sign of strength for the economy. we have no inflation. it a sign of strength for economy. get rid of money printing, the market comes up. i'm not all the way with you, steve but, middle of the road. melissa: gerald o'driscoll, let me ask you, is there any sign they think the economy is stronger that they take away that unemployment threshold? or does that tell you they think there is hidden up employment in the system and that is not a decent indicator any longer? >> well i think it is not a decent indicator and that is the best reason for taking it out. but it was boxing them in

because when they got to 6 point 5 they would have had to stop tapering. and clear they don't want to do that. melissa: they wouldn't said they would have to stop. they said a was a threshold. they tried to clarify the language. doesn't mean we'll automatically get out at 6.5. they said it's a threshold. now they don't even want to use that language. go heed. >> they were confusings people having it in there. employment growth is better indicator. the real reason they are continuing tapering they then don't have to tell you what they will do when at the stop the purchases. they're purchasing off a decision. they don't know what to do when they stop the purchases. how do they unload the portfolio? it is impossible. melissa: it is especially terrifying hear you say as a former dallas fed vice president it is impossible to get out. you don't think there is a good exit, gerri? >> it has never been done before. no matter what they say they don't have a strategy. it has never been done before. the other thing though that i would focus on, they took, they took a position that the

weakness has been due to the weather. so that is bullish. but by lowering the forecast for growth from 3 to 2.9, they're really saying it will be less than three. they're not saying they think it will be 2.9. it will be less than three. they're predicting growth. they're realizing growth will not be what it is normally. melissa: thanks so much to our fantastic panel. sit still. don't go anywhere, we have lots more coming up on the big fed decision day. this is fox business.

melissa: so we have the fed's decision to continue tapering. some say the fed's monetary meddling is the only hurting the economy. i want to bring in ron paul, who is with us now. dr. paul, what do you think of this decision? >> well, i don't think it is any new, no surprises. they still believe monetizing debt which is a real culprit. they believe in manipulating interest rates which causes a lot of problems. they still have this fiction purposely devaluing the currency and debasing currency at a certain rate is good and i think it is wrong morally and not good for the economy. they're arguing the case, inflation, they're eager for

inflation, in prices of 2% a year but now they can average it out so if it is 4 and 2, this is so far removed from a market economy and sound monetary policy that it is just, it is just an endorsement of the status quo of the they wonder why things don't improve? i don't think there was anything new there. it just shows they want to have this power. they believe -- melissa: staying path, we had former dallas fed vice president jerry o'driscoll saying he thinks there is no good exit strategy. this is from somebody who knows the inside of policy. does that concern you? how does it play out? >> they will not have a exit strategy because it would be painful. when there is correction there is pain. politicians and, everybody is a politician in washington including the federal reserve. nobody welcomes a correction. but a correction might be what is necessary. so no, there is no easy way out of the so it will be the perpetual undermining of the value of the dollar.

ultimately it will be rejected. it is now hinted, you know, when you look at what russia is doing with their dollars and why they're removing them from the holdings of the fed and what china is doing is buying less. one day that will get out of control. all this will be just fluff talk. all this, and statistics are so wrong too. when they talk about unemployment, they're talking about 6.5 versus 6.2, everybody pays attention to that. real unemployment is probably between 15 and 20, if you count all the you know employed and people that dropped out and they're worried about 6.5 and 6.2, giving fed more leeway. what a joke. melissa: what do you think the approximate bubble coming our way or the biggest headwind coming? we talked about the fact with negative real interest rates, the past when that happened, we've seen runaway inflation. or housing market bubble. do you think we'll see a bubble in stocks or what do you think is the big danger what the fed has done?

>> the whole economy is distorted. so there is a housing bubble to be concerned about again and you, you're looking at that stocks, they're back up, higher than they should be but i think it is the bond bubble. i think it has been persistent. it has been there since the 1980s. and it just can not go on forever. otherwise they defied all economic wisdom and all laws and they just can't do that. so it will end. that will be related to the dollar when the dollar is rejected, interest rates going up. that is why international events are very important. melissa: what do you think of steve forbes's idea to get out hard and fast right now. >> well i tend to agree with steve. it is politically difficult. i know it is not going to happen. melissa: right. >> i essentially have taken that position but, no, the politics of it is, it is like an addiction, like a drug. who wants to go cold turkey. no they don't. the symptoms are rough. and that is why those of us who argue for good monetary policy,

say you would purposefully bring on the symptoms? well, yeah. melissa: get it over with. >> when the symptoms come of a dollar crisis, that is much, much worse. melissa: ron paul, thank you so much. stay right where you are. we'll come back to you in just a moment. let's bring in our panel back in right now. forbes media chairman steve forbes. fox business's stuart varney and "wall street journal's" james freeman. what do you think of what ron paul had to say? i will let you go first. >> take a glimmer of hope of announcement at fed they pointed the finger at fiscal authorities. in other words president obama and the congress. that is another issue with this fed policy of ultralow rates. they're enabling terrible policy, overspending, overborrowing in the government. melissa: right. >> but if they actually took their, took the advice, let's hope the monetary folks, the central bank, fed would step back and allow better policies. melissa: go ahead, stuart. >> as a group policy the printing of money appears to be

well past its sell buy date. melissa: right. >> what the fed is tried is easy way out. steve wants them to chop it off right now. no more money printing that would be extreme and provoke a extreme reaction the they're taking easy way out. slow, slow taper, the easy way out. they're in an core. it's a rot earn corner. because they're looking at what, a slowing economy. melissa: right. >> and unemployment rate down to 6.2%? how do you get that without millions of people dropping out workforce. melissa: not like we're accelerating and they're trying to exit right now. you risk stalling the plane in midair. what do you think of the ron's idea the real danker is a bond bubble. >> no one in their right mind would buy 30-year treasury at current yield given state of the u.s. economy and the u.s. government. they're only doing it because they're practicing price controls. we know in the housing market when you have price controls you get shortages, you get distortions. same thing in the credit markets. so they have hurt access to

credit for small and new businesses. you just got, with today, the fed has no guiding rules. it is all whimsy. they make it up as they go along. melissa: he said something else, in other economic corners people get mad what you say, that's not what we're doing, we're monetizing the debt. do you believe we're monetizing the debt. what is the danger of that? >> what are they doing? buying a lot of government debt. they're the biggest buyers in many of these auctions. they're distorting the price. they're allowing the government to say, whoo-hoo, we're only running $600 billion deficit this year, they can get away with it, like they got a way with trillion dollar deficits because of cheap funding from the fed. melissa: they're holding interest rates low so they're with holding more than it. all of sudden interest rates go through the roof. >> deficit without tears. that is what you have right now. melissa: gentlemen, thank to all of you. we're counting down to the janet yellen meeting with the press. that is just minutes away. that is the next big event here on the back of the actual

decision. don't forget to tweet me your views on today's decision. we are taking another chance on bitcoin. is the cryptocurrency starting to look attractive once again given everything going on with the rest of our monetary policy? we're watching it move right now. we'll talk about this one. do you ever have too much money? we'll be right back.

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melissa: markets are reacting to the fed news now. traders are getting ready to hear janet yellen speak. nicole petallides is at the new york stock exchange. what is the mood on the floor there, nicole? >> it is interesting, you're starting to see everybody took the risk off the table. they got exactly what they expected which is that the tapering continues as planned, 10 billion each meeting. they see that.

they get exactly what they expected. of course they took off the threshold of 6 1/2%. we speak to jonathan corpina, he said, listen they take money off the table. we saw the market drop. we were down 90 points. we hit our lows immediately following the fed announcement. we saw some reaction. gold sold off. treasury prices fell. the dollar strengthened as they signaled further cuts. overall big picture you have a few sectors in the green, health care and telecom and financials. the utilities are the worst of the bunch. right now we're down 31% or 31 points. the point all three major averages are not too far off the unchanged line, taking this in stride and taking money off the table. melissa: nicole. thank you so much. congressman paul, i want to get a quick comment on you about bitcoin. it is trading $612. down slightly on the if he announcement. what do you think? how does this inform the future of the digit call currency in can we talk about money and not

mention bitcoin? >> if you want to. if you're going to talk to me and have me fully explain exactly how it works, i don't know that. i have a political position that it should be permissible. the fed shouldn't regulate it and people should look into it and hopefully understand it and hopefully it will give the dollar competition. when it comes to understanding it, comparing it to the reality of a commodity currency, you know, it's, a it's a stretch. i have a little problem with that but you know there was 1200 at one time too. melissa: does it look more attractive given what the fed is doing? if you feel like the fed is a bit out of control in their policy and how they're handling money do you think it pushes more people to look at something like about it coin? >> since i'm not very attracted to bitcoin, for me, if monetary policy continues to be out of control, and we have crises, then i look more for gold. melissa: okay. >> i've been doing that since it was $35 an ounce. it has been a long time since

the fed has done what it has done and destroyed the value of the dollar to the tune of, taking it from $35 an ounce or, as a matter of fact, $20 an ounce, up to 15,$1600. melissa: dr. ron paul, thanks very much for joining us. we really appreciate your time today. >> thank you. melissa: i want to get thoughts from our panel, steve forbes, jerry o'driscoll, james freeman the they're back with me. do you have a conversation talking about money without talking about bitcoin? treasury department dismissing it. undersecretary of treasury saying current regulations are sufficient. this doesn't qualify as a currency. what do you think, they're dismissing it too easily. >> it is not money. it changes too much in value and not useful. imagine getting paid in bitcoin. melissa: it is not going away. it is getting traction. >> it underscores people don't trust the dollar. people are looking for alternative currencies. one of the things i think you see in the next congress removing some of the barriers to

having alternative currencies in this country. melissa: james, what do you think? >> i'm starting to think about it coin can not be killed. melissa: yeah that's what i think. >> largest exchange collapses, various people associated with it are charged and arrested. the identity still not established from the person who created it. what it is you have to respect this demand for another currency option. melissa: yes. >> as we see the fed creating more and more money. and also a new payment system. i think there is a need for bitcoin or something like it, some follower, to give us a better global payment system to transact across borders. melissa: gerry, what do you think about that? what does it say about fed policy and the dollar about the mood of this country when we have this thing we all tried to dismiss early on and now you can't get rid of it as james said? seems like it is not going away. treasury trying to dismiss it. that could be a mistake. how do you interpret that? >> i interpret it much as other panelists interpret it,

symptomatic of the malaise with the dollar and concern about the dollar. the dollar globally for payments is still the dominant currency but its position is being eroded slowly over time. at the moment other national currencies are the competitor in global markets but the tenacity of bitcoin indicates something really fundamentally wrong with the dollar. i think we're all agreed on that. melissa: yeah. let me ask you, as we start to get closer to the end of our time here, how does the whole fed thing end? is there a chance that janet yellen is able to land this whole thing safely? that we see this continuing taper, 10 billion, 10 billion, 10 billion and it is all fine? what do you think, steve? >> well, i hope they do it and sooner the better. again they're still continue manipulating interest rates and they still don't understand that money doesn't move the economy. commerce does. money is simply a measure of value. melissa: right. >> they keep trashing it, manipulating it, they haven't

learned the lesson yet. melissa: jerry, what do you think? >> i would be surprised if there isn't a hard landing. there will be a crisis that will force the fed's hand. and -- melissa: what does that mean? >> in terms of bonds --, well, if the economy, for instance, one possible, if the economy really started to pick up and grow normally and banks decided to start lending out the excess reserves they have, you would get inflationary pressures many of us have been surprised haven't occurred already. melissa: well, james, real quick. >> i don't think they're scared enough. i think they feel like this is an accounting exercise. if they end up taking losses on portfolio it could be a serious problem. melissa: thanks to all three of you. we really appreciate it. and all the panels. don't go away, we're minutes away from janet yellen's press conference. we have got you covered right here. we're going to hear every word because at the end of the day it is all about money.

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from janet yellen's news conference. james, what is happening at the cme? >> the release was what we expected it to be. markets might be waiting to get more detail. they did pull away, we want to see that. it melissa: let's listen to janet yellen. >> good afternoon. please to join you for the first of my post fomc press conferences. like ben bernanke before me i appreciate the opportunity these press conferences afford to explain the decisions of the

fomc and respond to your questions. the federal open market committee concluded a two day meeting earlier today. as you know from our statement the committee decided to make another modest reduction in the pace of purchases of long-term securities. the committee also updated its guidance regarding the likely future path of the short-term interest rates. as i will explain in a moment more fully, this change in our guidance does not indicate any change in policy intentions as set forth in its recent statements. rather than changes clarify how the committee anticipates constantly evolve and after the unemployment rate declined 6.5%. let me explain the economic outlook that underlies these

actions. despite some softer recent day at the fomc's outlook for continued progress toward goals of maximum employment or inflation returning to 2% remains broadly unchanged. unusually harsh weather in january and february has made assessing the underlying strength of the economy especially challenging. broadly speaking, however, the spending and production data was somewhat weaker than we expected in january roughly in line with expectations. last time committee participants submitted economic projections. in contrast, labor market conditions continue to improve. it is 0.3% lower than the data

available at the time of the december meeting. further, broader measures of unemployment such as the use 6 measure which includes marginally attached workers and those working part-time but preferring full time work have fallen even more than the headline unemployment rate over this period. labor force participation has kicked up. the committee continues to monitor developments in global financial markets carefully, financial conditions remain consistent with the fomc's objectives. in some the fomc continues to see sufficient underlying strength in the economy to support ongoing improvement in the labour market. inflation has continued to run below the committee's 2%

objective. given longer-term inflation expectations appear to be well anchored and in light of the ongoing recovery in the united states and in many economies around the world, the fomc continues to expect inflation to move gradually back to its objective. the committee is mindful, below its objective it could pose risks to economic performance. the committee also recognizes policy actions tend to exert pressure on inflation that manifest only gradually over time. the fomc will continue assessing incoming data carefully to ensure policy is consistent with obtaining the fomc's long run objectives of maximum employment and inflation of 2%.

this is reflected in the individual economic suggestions in conjunction with this meeting, but the 16 fomc participant from board members, 12 reserve bank measurements, and each participant's projections are conditioned on his or her own view of appropriate monetary policy. the central tendency of the unemployment rate projections has shifted down by about 0.2 since december and stands between 6.1% and 6.3% at the end of this year. the unemployment rate is projected to reach its longer run normal level by the end of 2016. the central tendency of projections for real gdp growth stands at 2.8% to 3% to 2014.

it remains somewhat above that of the estimates of longer run normal growth through 2016. as i noted fomc participants continue to see inflation moving when we gradually back towards 2% over time when the economy expands. the central tendency of the inflation projections is 1.5 to 1.6% in 2014 rising to 2.7 to 2.0% in 2016. let me turn toward decisions in measured reduction in the face of asset purchases. starting next month we will be purchasing $55 billion of securities per month, down $10 billion per month from our current rate. even after today's action takes effect we will continue to

significantly expand our holdings of longer-term securities and we will also continue to roll over treasury securities and reinvest principal payments for the fomc's holdings of agency mortgage-backed securities and agency mortgage-backed securities. sizable land increasing holdings will continue to put downward pressure on longer-term interest rates. support mortgage markets and make financial conditions more accommodative, helping to support job creation and a return of inflation to the committee's objective. the fomc views today's decision to reduce the pace of asset purchases as consistent with the decisionmaking framework laid out last december and still in place today. as before, if incoming

information broadly supports the committee's expectation of ongoing improvement in labor markets and inflation moving back over time toward its long run objective the committee will likely continue to reduce the pace of asset purchases and measured steps of future meetings. purchases are not on a preset course and the committee's decisions about the pace of purchases remain contingent on its outlook for jobs and inflation as well as assessment of the likely efficacy of cost of such purchases. today the fomc also updated its forward guidance regarding the path of short-term interest rates. as emphasized in this statement the new guidance does not indicate any change in the policy intentions of the fomc but instead reflects changes in conditions we face.

let me explain this more fully. in december of 2012 the committee first stated its guidance in terms of economic thresholds stipulating the current low range for the federal funds rate target would be appropriate at least as long as the unemployment rate is above 6.5%. inflation is projected to be no more than half a percentage point above our longer run goal and longer-term inflation expectations remain anchored. since that time, progress in the labor market has been more rapid than we anticipated. inflation has been lower than the committee expected. the threshold served well as the useful guide to policy over the past year, last december the fomc judged it appropriate to

update that guidance noting that the current target range for the federal funds rate would likely be maintained, well past the time the unemployment rate declines below 6.5% especially if projected inflation continues to run below the committee's blonder bowl. today the committee has for the revised its forward guidance to better reflect conditions as they now stand and are likely to evolve over coming quarters. the revised formulation starts with a general description of the factors that drive fomc decisionmaking and provides the fomc's current assessment of what those factors will likely imply for the future path of short-term interest rates. in particular the committee states that in determining how

long to maintain the current 0-1% target range in the federal funds rate, it will assess progress, both realized and expected towards its objectives of maximum employment and 2% inflation. in short, the larger the shortfall of employment or inflation from the respective objectives set by the fomc and longer any such shortfall is expected to persist the longer the target federal funds rate is likely to remain in the presence of 2% range. the fomc will base its ongoing assessment on a wide range of information including measures of labor market conditions, indicators of inflation pressures and inflation expectations and readings on financial developments. as i have noted the fomc's

assessment of these factors at present is consistent with the characterization provided in previous forward guidance. the committee continues to anticipate the conditions will likely warrant maintaining the current range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the committee's 2% longer run goal and provided that longer-term inflation expectations remain anchored. the fomc also supplemented its guidance pertaining to the period after the asset purchase program ends and the initial increase in the federal funds rate target has occurred. the statement continues to note that in deciding on the case for

remove an accommodation the committee will take a balanced approach to obtaining its objectives. the statement now adds the committee's current anticipation, that even after employment anti-inflation are in year consistent levels, economic conditions may for some time warrant keeping short-term interest rates below levels that committees used as normal in the longer run. this guidance is consistent with have for appropriate policy as reported in the participant's projections. which showed the federal funds rate for most participants remaining well below normal values at the end of 2016. all flow fomc participants provide a number of explanations for the federal funds rate target remaining below its

longer run normal level, many cite the residual impact of the financial crisis in some notes that the potential growth rate of the economy may be lower at least for a time. in summary the committee's actions today reflect its assessment that progress in the labour market is continuing but that much remains to be done on both the jobs and inflation fronts. unemployment is still elevated, underemployment and long-term unemployment remain significant concerns and inflation is running significantly below the fomc's objective. these conditions warrant the continuation of highly accommodative policy reflected in today's policy statement. the federal reserve's interest rate guidance and substantial

and still increasing holdings of longer-term securities will ensure that monetary policy remains highly accommodative promoting the fomc's objectives of maximum employment and price stability. thank you. i will be glad to take your questions. >> madam chair, the associated press. could you give us a little insight into how the decision was made on dropping the 6.5% numerical target and forward guidance, was there any concern expressed, there has been criticism on forward guidance, that it is confusing markets, not helping them in some ways. was their concern expressed that perhaps it would have been better to go to a lower target than 6%? could you also address the

concerns raised in the dissent by dropping this lowers the commitment on fighting low inflation? thank you. >> thanks. as i mentioned in my statement, the reason the committee felt the time had come to revise the forward guidance is not because we think it has not been effective. the committee does think it has been effective. i think it has had a very useful impact in helping markets and distend our expectations in shaping their own, but it is becoming comment as the unemployment rate gets closer and closer to 6.5% to breaching that threshold, seems like the one that is likely to be breached. the question is markets want to know, the public wants to

understand beyond that threshold how we decide what to do. so the purpose of this change is simply to provide more information than we have in the past even though it is qualitative information about what we will be looking at as the unemployment rate declines below 6.5% in deciding how long to hold the federal funds rate at the 0% to 1/4% range. we have tried to give the general formulation of what we will be looking at which is how far are we, how large are the shortfalls in achieving our goals and how fast do we expect progress to be the main factors we will be looking at? started with an unemployment rate as the thresholds that was easy enough for the committee to say with an unemployment rate above 6.5%, we

know we are not close to full employment, not close to an employment level consistent with our mandate, and less inflation where significant concern we wouldn't dream of raising the federal funds rate target. the committee has never felt that the unemployment rate is this sufficient statistics for the labor market. if i had to choose one indicator of the labour market the unemployment rate is probably as good a one as i could find, but in assessing the real state of slack in the labour market and ultimately inflationary pressures or deflationary pressures that could result from that it is appropriate to look at many more things and that is why the committee now states we will look at a broad range of information so the closer we get as we narrow in on coming close it to the target we want to

achieve we will be carefully considering many indicators of how close are we to our target. those are the main reasons. now, you asked as well about the descent. president kocharlokoda noted in his dissent that he endorses the new guidance about the likely path of the federal funds rate after we begin to finally raise it. that indicates that it is unlikely to be back to normal levels for some time but he questions whether or not the reformulated four week guidance shows sufficient commitment of the committee to its 2% inflation objective. and i will simply say on my own behalf and on behalf of the

committee that we are fully committed to the 2% inflation objective and we do not want to undershoot inflation for a prolonged period of time. and gradually, only gradually move inflation back to 2%. if the committee had real concerns that inflation were going to remain consistently below 2% by feel confident that the committee would act to prevent that. >> in the interest rate projections made by fomc participants that supplement your statement, a slight upward drift in expectations for rates going to 2016. a majority of officials see

rates and 1% or higher and this forecast round in the last forecast round majority saw officials less the 1%. wonder if you could explain why there is the small upward drift and expected rates among committee members, with to these projections were a good guide where the path of rates were going forward and also how you reconcile this upward drift with the assurances the committee makes in its statement that rates stay below normal levels well into the future. >> to my mind there is limited upward drift. the committee assessing for the economy, if you compare today's assessment with december's is

virtually identical, nothing has changed, the overall committee assessment is the outlook. as i mentioned unemployment has come down, the labour market more broadly has improved, a the more than we might have expected about more rapid improvement in the unemployment picture might explain what they do. and the upward shift in those dots, but more generally, so to speak as the primary way in which, speaking about policy to the public at large. the fomc statement is the device that the committee as a policymaking group uses to express its opinions and we have

expressed a number of opinions about the likely path of rates. in particular if the committee endorsed the views that it anticipates it will be a considerable period after the asset purchase program ends before it will be appropriate to begin to raise rates and of course on our present path, that is not preset, we would be looking at next fall. so i think that is important guidance. looking further out, let's say if you look toward the end of 2016, when most participants are projecting that the employment situation, the unemployment rate will be close to their notions of mandates consistent or longer run normal levels. what you see when you look this time if you gaze at the picture

from december or september which is the first year that we showed those thoughts for the end of 2016, is the massive point that are notably below what the participants believe is the normal longer run level for non level short-term rates, the committee today for the first time endorsed that as a committee view. i think that is significant and what we should be paying attention to and i would simply warn you that these thoughts are going to move up and down over time. a little bit this way or that. the dots move down a little bit in december relative to september and moved up ever so slightly. i don't think it is appropriate to read very much into it. more generally the end of 2016 is a long way out.

monetary policy will be geared to we evolving conditions in the economy and the public does need to understand as those views evolve the committee's views on policy will likely evolve with them and that is the kind of uncertainty that the committee would want to eliminate completely from its guidance because we want the policy we put in place to be appropriate to the economic conditions that will prevail years down the road. >> thank you. i wish to look not to the docks but the statement. i met one particular paragraph which says the committee anticipates a lower than normal rate even once you return to the long run. just so i understand correctly it means once you hit the long run unemployment rate which is

5.4%. once you get at 2% inflation rate the market should not anticipate the longer run 4% fed funds rate and that would be question 1. question 2, doesn't that implicitly suggesting a shallow glide path once you take off or fed funds rate would first hike them, that is just shallower glide path to the funds rate. >> it does suggest they shall were glidepath and wh!!shallowee committee is expressing here based on the understanding we have developed about what are the economic forces that have been driving economic activity. we had a series of years now in which growth has proven disappointing. members of the committee have different views about why this

is likely to be true that the funds rate when the labor market is normalized and inflation is back to our objective, maybe a slightly different view on exactly why is it is likely to be the case that interest rates will be all lowered than they would in the longer run but for many it is a matter of head winds from the crisis that have taken a very long time to dissipate and are likely to continue being operative. some examples, i would say, is many households are undergoing balance sheet repair. there are many underwater mortgage holders, difficulties for gaining access to credit free samples through home equity lines of credit, for some that

makes it difficult to finance small businesses. mortgage credit is very difficult to get without pristine credit scores that improved somewhat over time but it is not back to normal. for some fiscal policy is somewhat tighter than would be expected over the next several years. for some it is head winds from the global economy play a role as well. the general assessment is even after we had an accommodative monetary policy for long enough to get the economy back on track, in the sense of meeting our objectives, substantive policies that will be appropriate to accomplish that will be easier or involve somewhat lower than would be normal short-term interest rates. it eventually years later most

people think they will go back up but as you said that suggest the path will be gradual but i do want to emphasize this is a forecast and this will be the committee's forecast based on its understanding of the economy at this time and as we watch the economy over the next several years that could evolve. >> washington post. you mentioned in your testimony on capitol hill recently that you assess the bounds of weather affects versus fundamental weakness in the economy as the reason for the slowdown in growth in the first quarter and you mentioned in a statement the weather specifically. does that mean the fed's analysis has come down on the side of whether are you concerned there could be something else going on that could be contributing to slow growth and lower your forecast

for d e p growth this year? >> certainly the analysis that we have done and we did spend a lot of time discussing the weather and how it has affected businesses at households in various parts of the country. certainly the weather has played an important role in weakening economic activity in queue 1. is not the only factor that is at work in most projections for growth in the first quarter. it is an important factor. it is not the only factor. i would say it is likely, in the view of most of the committee, to begin to watch out in the second quarter and we can even see some rebounds. i would say what we said about the weather is complicated and confusing, so le