our own nicole petallides at new york stock exchange. you don't want to miss ron paul as well. the outspoken fed critics weighing in on janet yellen and fears over inflation here in just minutes. first i want to go to peter barnes right now who is live at the fed. >> the fed changes its interest rate guidance. the fed does change its interest rate guidance adding it will be patient with raising rates but also retains its considerable time language because of falling inflation and three fed members dissented on this policy decision. let's go to the economic analysis in the fed statement. quote, information received since the federal open market committee met in october suggests that economic activity is expanding at a moderate pace. labor market conditions improve further with solid gains and a lower unemployment rate. on balance a range of labor market indicators that suggest underutilization of labor resources continues to diminish. household spending is rising moderately and business fixed

investment is advancing while the recovery in the housing sector remains slow. inflation has continued to run below the committee's longer-run objective partly reflecting declines in energy prices. market-based measures of inflation compensation declined somewhat further. survey-based measures of longer term inflation expectations remained stable. skipping over redundant language from the last statement, the fomc expects inflation to rise gradually toward 2%, its target as the labor market improves further and the transitory effects of lower energy prices dissipate. the fed keeps the fed funds rate at 0 to a quarter percent. no change there. skipping ahead to the new language. quote, based on its current assessment the committee judges that it can be patient beginning to normalize the stance of the monetary policy. the committee sees this guide against consistent with the previous statement likely appropriate to maintain the 0 to

quarter% federal fund rate for considerable period of time following the asset purchase program in october if projected inflation continues to run below the committee's 2% longer run goal. skipping to the vote it was 7-3. fisher, kocherlakota, plosser dissenting for reasons they dissented in the past and but all three leave the fed in 2015. economic projections have been tweaked. the change, no change in the projection for gdp for 2015. and at 2.8%, as compared to the september projections. and it sees about the same going out for 2016, 2017. for the unemployment rate it did lower the projection for that for 2015 to 5.3% from 5.5 in the september projections and it seize in-- sees inflation, running lower forecast inflation than in the last meeting. 1.3% for 2015 and up close to

its 2% target for 2016 and 2017. finally let's get to the projections for policy firming. the bar chart and the dot plot right now, 15 of the fed members expect to raise rates in 2015 versus 14 in september. and then two for 2016. and as for the dot plot of where they expect rates to be as they start to raise them, looks a little more dovish. looks like they, likely because of the inflation picture, looking at maybe up around 1% for 2015, for the fed fund rate, up around 2 1/2% in 2016 and maybe 3 1/2% by 2017. but a slightly less steep slope. melissa, back to you. melissa: wow, peter barnes, thank you so much. let's get reaction from the panel. the market is going bananas. we're up 300 points right now. before the fed decision we were up 140, 150.

look at that spike. james freeman, what do you think? >> it is disappointing. the market is going up on word that easy money era continues. we're now in the sixth anniversary of near zero interest rates. we won't even take considerable time. melissa: they're piling on. they're piling on. >> what they ought to do not get rid of it, they ought to stop issuing forward guidance and start gradually bringing rates back to normal. melissa: charlie gasparino? >> who predicted this? joe fami and trader and anthony scaramucci of skybridge capital on fox business. they said there was no way the fed would do meaningful rate increases because they want to keep this market going for the end of obama's term. if you listen to fox business you made a lot of money today. melissa: john lonski, what do you think today? they're piling on with the language. fed to maintain near zero interest rates for considerable period of time. it is not enough, saying that they can be patient in normalizing monetary policy that was piling on. >> janet yellen put on santa claus outfit and had a gift for

everybody today or tried to do so at least of the truth is there is no pressings need for a rake hike anytime soon. we have disinflation. core inflation is well-contained. we also have a stronger dollar. and given recent market volatility and rising slack abroad, perhaps the fed did the right thing. melissa: steve moore? >> yeah. look the fed is keeping the punch bowl around for at least another three to six months. you know, i would say this is not the janet yellen effect. this is the shale oil and gas effect. this is all a result of the fact that oil prices are plummeting. we saw what happened to the cpi where it actually was falling. i sort of disagree with my friend james freeman. what is the case right now for inflation? i don't see it anywhere in the economy and it is a windfall as a result of these low oil prices. melissa: before we answer that i want to bring in our folks on the floor of the stock exchange and cme because that's where we're seeing a lot of reaction. nicole what is the action there.

>> we're showing the dow, did you see it with your eyes? 300 points. we got a spike there. treasury yields came back a little bit. they're back to 2.11%. vix took a breather. that pulled back. market certainly loving it. all green on the screen. all 30 dow components on the screen green as we take in the latest fed statement. melissa: scott shellady. are you with us? >> i'm here, can you hear me? melissa: yes, go ahead. >> i think what was more surprising to me most of the fed still believes we will have some the of hike next year. i'm saying no hike next year. i crazy enough to say we have some sort of q4 in 2016. >> i agree. >> i don't see the strength in the economy that anybody else does and numbers again we got today are always going to be slightly weaker. housing hasn't come back. show me the strength that makes you feel so good about this economy and raise rates. >> it is political. >> exactly right. >> it is political. barack obama wants to leave with dow 20,000 or whatever. janet yellen will do whatever to help him do that.

do whatever it takes. point out one other thing. this is my basic knowledge of economics. you guys can correct me if you want. you start raising interest rates that is bad for commodity prices, oil could go down even further. i think fed is worried about oil going down even further and some massive blowup of a hedge fund that has commodity, exposure to commodities. >> that's, the fed should not be worried about cheap oil. >> but they are. not should, are. >> this idea that we ought to have more qe an continued zero rates, why not? i think we now got years of experience saying that qe has lost whatever impact it ever had. this is not an emergency anymore. the more you keep these emergency rates the more you're distorting investment decisions and more difficult be for the fed to unwind later. >> get back to that. steve moore. >> james, show me inflation. look i've been wrong on

inflation story. now, i don't see when you've got basically close to falling prices. >> what is the market doing, steve. >> booming equities why you want to bring that party down? >> for mr. moore's behalf, i would say wage inflation is picking up a little bit. holding in quite nicely. not going under 2% annually. melissa: this is equity bubble? you don't feel like equities gotten way out ahead of the problem. >> profits. companies are profitable. >> i would say this, what they should do, i think one of the things our viewers we need to delineate what they should do and what they are going to do. i believe keeping rates this low creates massive dislocations in the market. some sometime we will have to pay for that. it will be nasty. what are they going to do? keep rates low. if you're average investor with rates this low, inflation is low because of oil boom, going to buy the market? >> charlie, are you worried about deflation? if you raise rates in this environment you will see even further reduction in price.

>> you're right. you're absolutely right particularly with oil. melissa: james freeman, when does the bill come through. >> no one else is worried? obvious let fed is worried of the they keep trotting out different potential idea for how they're going to finally raise rates once they finally get the courage to do it. they don't think their traditional tools will work. so even if you're not worried, the people who are running -- melissa: hang on, guys. when does the bill for all this come due? >> who knows that? >> it may never. look at japan. japan has had zero interest rate policy for years and japanese inflation is practically nothing. >> in the united states, what are rock bottom rates doing? enaging the federal government to spend and spend and spend beyond its means. eventually one way day of reckoning comes due when the rates start to go up, all of sudden interest payments are bigger than medicare. melissa: quick pause. hanghang on to those thoughts because the fed's fiercest

critic is on the other side of this break. ron paul on the fed's action today and what demand to see from them in the new year. i can feel him gnashing his teeth now at this decision. plus the news conference we're all waiting for. fed chair janet yellen in the hot seat. we've got you covered. don't go anywhere. more "money" right away.

melissa: you're looking at live pictures from the federal reserve as we await fed chair janet yellen's news conferences. we'll bring it to you live when it starts. it is minutes away. let's go down to nicole petallides down on the floor of the new york stock exchange. the stocks are popping. we are up 300 points but 281, wow. >> the interest rate hikes gave this market a real pop. the dow moved up over 300 points in total. it is not too far off the level. it has held on to the gains. all 10 sectors we follow so closely in the green. we had energy higher all day long. energy, materials, financials still holding on. i took a look at financials because those have been reacting. some people were saying buy financials as interest rates go

up. might be a good group to get into. they have held on to the gains beautifully. we have gotten our policy statement, the economic projections. with that they kept the considerable time language as well as adding to be patient. interesting, marble market took off on this. melissa: yeah. nicole, thank you so much. we're counting down to the live news conference with janet yellen, who will face the media regarding the fed's decision today. right now though i want to bring in former congressman ron paul. he is the host of the ron paul channel. he is an outspoken critic of federal reserve. how do you feel about what they did today, sir. >> not a bit surprised. every free market economist i know predicted all along they would never raise interest rates and she more or less verified this she is a very, very effective cheerleader. she is the cheerleader for the stock markets. that is the purpose of the fed, to keep securities high and the stock market roaring but at the expense of putting a lot of risk into the bond market and debt market. that is where all the inflation is. of course there is a sort of a

minor problem already being recognized here in texas. over half a trillion dollars was pumped into fracking and that's on the rocks. you're going to see some ramifications from that. and that could only come from zero interest rates. if the fracking business had to have been supported by savings, it wouldn't have happened. so yes, there is roaring inflation out there and everybody says, no, only inflation we measure is cpi and only thing that counts. that is fallacy and -- melissa: what do you see the roaring inflation. >> i think of the bond market. the price of a bond. amount of debt that we accumulate. i think it is inflated. see i measure inflation not by the cpi. i measure inflation of the balance sheet of the fed, creation of credit out of thin air, the creation of debt that. sin nation. that is where the problem originates. sometimes cpis go up. sometimes housing bubbles develop. sometimes nasdaq bubbles develop. and right now there is a bubble

being corrected in the energy industry. although it was precipitated for geopolitical reasons to punish russia i think it will come back to haunt us as well because the consumer, enjoys a break, there will be a lot of businesses, and i suspect, even in texas might get hit on the corrections that have to come in the energy fields. melissa: so when do you think the bill comes due? you think inflation is being hidden right now in the bond market. what does it look like when the bill comes due? what precipitates it? what is the fallout? >> it will be some major crisis. that is the one thing that is unpredictable. obviously markets that buy stocks. they're not worried about it. they were instantaneously for the next minute and the next day but there will be some failure someplace out there just as the failures that have accumulated. i mean the breakdown of the system in 07, and '08, weren't many people predicting that. but a few failures.

mows reese thing happened recently but was the fight we saw in the passage of the omnibus bill making sure that the derivatives markets would be protected by fdic and the banking system. that is big-time stuff. they know what is going on. they know it is very fragile. and big banks were not going to get stuck with this so the five big banks got their protection. it will be dumped on taxpayers just as the lasko laps was. melissa: ron paul, thank you so much for joining us. we appreciate your time, congressman. >> thank you. melissa: the panel is fired up and ready to react to ron paul as we count down minutes until janet yellen takes the stage and moves the markets again. do you ever have too much money? no way. we'll be right back. here's a question for you:

as nations develop over the next 25 years, the world will have almost twice as many cars. how much fuel will be needed to power them? about the same as today? 50% more? 100% more? the answer is... about the same as today. by 2040, advances in fuels and vehicles could enable about 75% better fuel economy than today. take the energy quiz -- round 2. energy lives here.

melissa: joining me now, david asman, tom sullivan, along with steve moore, heritage foundation chief economist, also a fox news contributor. i just want to clarify out there because some other news outlets are getting it incorrect. we did say it properly. fed saying patient is consistent with considerable time. they added on the language they will be patient in terms of normalizing rates. they left in considerable time. steve moore, what do you think? >> you know, i just don't understand the pessimism that's been expressed on these panels. think about this. what we've got, melissa. we have booming stock market, right? we have interest rates as low as they have been in 50 years. we got inflation which is virtually nonexistent and everybody is saying stop, stop, stop the party. i mean i just don't get that. >> you are not worried there will be a bill to pay at some point? >> let me say about this. ron paul said inflation is in the bond market. if there is inflation in this economy if it is to come, why

are people buying 30-year treasury bills at 3 or 4% interest rate? >> but hold on a second, steve, you say you don't understand what the problem is. >> yeah. >> then i don't understand what happened with the last elections. the american people are very unhappy even though with inflation is very low, it is still higher than interest rates. that means that the money that you save is being eaten away by inflation. i understand inflation is historically low but if interest rates are even lower and that is what is killing average american. >> you want interest rates to go up? you want people to pay more? >> it is norm going back 40 years as interest rates being above inflation so that savers are not hurt. you don't want the money that you're in the bank worth less tomorrow. >> and you don't create bubbles when you have interest rates above inflation. melissa: hang on. hang on. this is what i want to, steve moore. hang on for one second. i'm wondering if you could sit out here with the man behind the curtain managing the economy and

keeping interest rates low and juicing the stock market and everything can be find why haven't we had managed economy all long? if this works with no externalities wouldn't we do it all the time? >> there is bubble that is growing. we had the housing bubble. that blew up. we have the oil bubble which is now blowing up. we got the stock market bubble which is some day going to blow up as we. it is all being stimulated by these super low interest rates artificially-manipulated interest rates. that is the problem with the manipulation. melissa: hang on the we'll squeeze in another break. we're minutes away from janet yellen and her news conference. would you ask her? i want to hear from you. follow me an facebook and twitter. give me your thoughts. more "money" right away.

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market statement, doubling increase, briefly breaking above 300 points. oil cutting its gains but still up 1% on the day. federal reserve chair janet yellen is set to speak any minute now as the financial world waits with bated breath for her remarks. what would you ask her? panel has questions of their own. james, david and john are dach with me. what would you ask. >> when will the fed stop being such a huge dominant player in the economy? but the specific one, how will you get out of this janet yellen? how are you going to get out of this environment? melissa: slowly. very slowly. >> we hope so but i think she is wondering the answer to this question. it will be interesting watching the fed as their traditional tools don't work try to figure out how they manipulate rates when they finally decide to raise them. melissa: on twitter, jack says ask janet what it will it take to raise interest rates so people save more money. that is what we've been talking about. >> similar to that, i ask her the harm endured by average

american savers and small businesses because they have endured harm with zero interest rates is that worth the benefit of low rates to wall street? the purpose of the fed is not to be a cheerleader for the stock market. i'm very happy stock markets are up. that is great news. great for mr. lonski. great for anthony scaramucci -- melissa: widening income gap. making income gap even wider because that is amazing because that is the opposite what this administration is supposed to do. scott on twitter says, why does not janet yellen think our policy not already or like japan's? >> it is. united states is in a situation i would call japan-light. our population is aging. not as see rearly or rapidly as it did in japan. the u.s. workforce being subject to increasing global competition. that is reining in wage growth, much the same thing happened in japan. and i would ask janet yellen by the way, why are we so

u.s.-centric when we look at the data? when the u.s. economy is becoming increasingly globalized. does the fed have any idea what is happening to the global unemployment rate, the global rate of capacity utilization? so that we could better florida inflation risks. melissa: if we could print money, lower interest rates and manage our way to prosperity through this fake system, we would have been doing it all along. i mean there is a price to pay at the end of the day, no? >> eventually -- melissa: steve moore disagrees. >> value of an economy is based on what we can produce, things we can create, not on how our central bank manages credit and lending. and i think that's one of the reasons we're not getting robust growth. we've been bumping along in that 2, 2 1/2% range in part because the fed is distorting the allocation of credit. >> melissa, to your point, we had century of planned economies most of the 20th century, fascism, corporate facism or

communism. we have a lot of dead bodies going down that road. we're not close to there. but that is the danger of planned economy. eventually you have to change so much of our behavior as individual that it becomes dictatorial. we don't want to go down that route. melissa: we're waiting any second for janet yellen to come out. that is what you're looking at one side of your screen. she is supposed to be out there right now. she will be here any second. what do you think she will say, john lonski? >> she will say the u.s. economy is improving, however as recent market volume at this time indicates there is still above average risk and you have to proceed cautiously with inevitable firming of monetary policy, absolutely. all right, you can see here taking the mic right now. let's listen in. >> good afternoon. the federal open market committee concluded its last meeting of the year earlier today. as indicated in our policy statement, the fomc reaffirmed its view that the current zero to one quarter% target range for

the federal fund rate remains appropriate. the committee also updated its forward guidance for the federal fund rate, indicating that the committee judges that it can be patient in beginning to normalize the stance of monetary policy. this new language does not represent a change in our policy intentions and it is fully consistent with our previous guidance which stated that it likely will be appropriate to maintain the current target range for the federal fund rate for a considerable time after the end of our asset purchase program. but with that program having ended in october, and the economy continuing to make progress toward our objectives, the committee judged that some modification to our guidance is appropriate at this time. i will have more to say about

our policy decisions in a moment but first let me review recent economic developments in the outlook. in the labor market progress continues toward the fomc's objective of maximum employment. the pace of job growth has been strong recently, with job gains averaging nearly 280,000 per month over the past three months. over the past 12 months, job gains averaged nearly 230,000 per month. the unemployment rate was 5.8% in november, .3 lower than the latest reading available at the time of the september fomc meeting. broader measures of labor market utilization have shown similar improvement. and the labor farce participation rate has leveled out. as noted in the fomc statement,

underutilization of labor resources continues to diminish. even so there is further room for improvement with too many people who want jobs being able to find them, too many who are working part time but would prefer full-time work and too many who have given up searching for a job but would likely do so if the labor market were stronger. the committee continues to see sufficient underlying strength in the economy to support ongoing improvement in the labor market. real gdp looks to have increased robustly in the third quarter. reflecting solid consumption and investment spending. smoothing through the quarterly ups and downs earlier this year, real gdp expanded around 2 1/2% over the four quarters ending in the third quarter. and the available indicators

suggest that economic growth is running ruffle that pace in the -- roughly that pace in the current quarter. the committee continues to expect a moderate pace of growth going forward. inflation has continued to run below the committee's 2% objective and the recent sizable declines in oil prices will likely hold down inflation in the near term. but as the effects of these oil price declines and other transitory factors dissipate, and as resource utilization continues to rise, the committee expects inflation to move gradually back toward its objective. in making this forecast the committee is mindful of the recent declines in market-based measures of inflation compensation. at this point the committee views these movements as likely to prove transitory and survey-based measures of longer term inflation expectations have

remained stable. that said, developments in this area obviously bear close watching. this outlook is reflected in the individual economic projections submitted in conjunction with this beating by the -- meeting by the fomc participants. as always peach participant's projections are conditioned on his or her own view of appropriate monetary policy. the central tendency of the unemployment rate projections is slightly lower than in the september projections and now stands at 5.2 to 5.3% at the end of next year. in line with its estimated longer-run normal left. committee participants generally see the unemployment rate declining a little further over the course of 2016 and 2017. the central tendency of the projections for real gdp growth

is 2.3 to 2.4% for 2014, up a bit from the september projections. over the next three years the projections for real gdp growth run somewhat above the estimates of longer-run normal growth. finally, although fomc participants project inflation in the near term to be lower on account of the decline in energy prices, they continue to see inflation moving gradually back toward 2%. the central tendency of the inflation projections is 1.0 to 1.6% next year, rising to 1.8 to 2% in 2017. as i noted earlier the committee reaffirmed its view that the current zero to 1/4% target range for the federal fund rate

remains appropriate. regarding forward guidance for the federal fund rate, our october statement indicated that it likely would be appropriate to maintain the current target range for the federal fund rate for a considerable time following the end of our asset purchase program especially if projected inflation continues to run below the committee's 2% longer-run goal. today's statement which indicates that the committee judges the that it can be patient and beginning to normalize the stance of monetary policy, does not signify any change in the committee's policy intentions asset forth in its recent statements. as before this judgment is based on the committee's assessment of realized and expected progress toward its objectives of maximum employment and 2% inflation.

, an assessment that is based on a wide range of information, including measures of labor market conditions, indicators of inflation pressures, and inflation expectations and reads on financial developments. of the. given that the committee is not signaling a change in policy why did we update our guidance? the reason is that with the asset purchase program having been wound down in october, it seemed less helpful to continue to communicate about the possible timing of our first rate increase with reference to an event that is receding into the past. instead we have shifted to language that better reflects the committee's focus on the economic conditions that would make liftoff appropriate. employment is rising at a healthy rate and the u.s. economy is strengthening.

reflecting in part a highly accommodative stance of monetary policy. of course inflation has been running somewhat below our goal of 2%. but we project that gap to close gradually over time. as progress in achieving maximum employment and 2% inflation continues at some point it will become appropriate to begin reducing policy accommodation. but based on its current outlook, the committee judges that it can be patient in doing so. in particular the committee considers it unlikely to begin the normalization process for at least the next couple of meetings. this assessment of course is completely data dependent. if incoming information indicates fasterring from guess towards the committee's

employment and inflake objections than the committee now expects the committee target range for the federal fund rate is likely to occur sooner than currently anticipated. conversely if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated. once we begin to remove policy accomodations it continues to be the committee's assessment that even after employment and inflation are near mandate consistent levels, economic conditions may, for some time, warrant keeping the target federal fund rate below levels that the committee views as normal in the longer run. this guidance is consistent with the paths for appropriate policy given by fomc participants. assuming that the economy evolves broadly in line with

participants expectations, almost all participants believe it will be appropriate to begin raising the target range for the federal fund rate in 2015. there are a range of views on the appropriate timing of liftoff within the year. in part reflecting differences in participant's expectations for how the economy will evolve. by the time of liftoff, participants expect to see some further decline in the unemployment rate and additional improvement in labor market conditions. they also expect core inflation to be running near current levels but foresee being reasonably confident in their expectations that inflation will move back toward our 2% longer run inflation objective over time. of course as i previously

emphasized, the timing of the initial rise in the federal fund rate target, as well as the path for the target thereafter, are contingent on economic conditions. by late 2016, the median projection for the federal fund rate at 2 1/2% remains more than a percentage point below the longer-run value of 3 and 3/4% or so projected by most participants. even though the central 10 den sip of the unemployment rate by that time is slightly below its estimated longer run value and central tendency for inflation is close to our 2:00% objective. fomc participants provide number of explanation foss for federal fund rate runner longer than the

level for some time particularly the residual effects of the financial crisis which are likely to continue to constrain household spending and constrain credit availability for some time. but as these factors dissipate further, most participants expect the central fund rate to move to its closer longer-run normal level by the end of 2017. finally the committee will continue its policy of reinvesting proceeds from maturing treasury securities and principle payments from holdings of agency debt and mbs. the committee's sizable holdings of longer-term securities should help maintain a accommodative financial conditions and promote further progress toward our objectives of maximum employment and inflation of 2%. thank you and, i will be happy to take your questions.

>> jon hilsenrath from the "wall street journal." chair yellen, a number of fed officials have projected in the lead-up to this meeting most likely timing for liftoff was around the middle of next year. i wonder if you could clarify that. you said in your statement that patient means not for at least two meetings. your forecast that the fomc's forecast seemed to be consistent with something like a middle of the year liftoff. can you speak to that? an you can you also speak to the downdraft we're seeing inflation and particularly market-based inflation expectations and whether that gives the committee any hesitance toward proceeding toward liftoff in the months ahead? >> so, i did say that the statements that the committee can be patient should be interpreted as meaning that it is unlikely to begin the

normalization process for at that time least the next couple of meetings. now that doesn't point to any preset or predetermined time at which normalization is, will begin. there are a range of views on the committee and it will be dependent on how incoming data bears on the progress the economy is make. first of all i want to emphasize that know mote no meet something completely off the table. if we see see faster progress toward our objectives than we currently expect that it is process of normalization would occur sooner than we now anticipated and of course the converse is also true.

so at this point we think it unlikely that it will be appropriate that we will see conditions for at least the next couple of meetings. that will make it appropriate for us to decide to begin normalization. a number of committee participants have indicated that in their view conditions could be appropriate by the middle of next year but there is no preset time and there are a range of vice as to what the -- when the appropriate conditions will likely fall in place. that is something we'll watch closely as the year unfolds. you asked also i think about inflation. and as i mentioned in my press statement, especially with the downward pressures on inflation, that we expect to see for a little while because of the declining oil prices, and

falling import prices, we certainly expect headline inflation to be on downward pressure for a while. and as i mentioned, most participants do envision that conditions will be appropriate sometime during this coming year to begin normalizing policy. and they, do largely expect that inflation will be, core inflation will probably be running close to its current level. and headline inflation could even be lower. but what they will want to have is a feeling of reasonable confidence that when we start the process of normalizing policy, that it will be moving up over time. and of course, as labor market conditions continue to improve, history suggests that as long as inflation expectations remain

well-anchored, that is likely to occur. >> marti krutsinger with the associated press. geoffen what ask happening now with transition of the fed, there seems to be at passenger developing that the market expects big news to come when you have a press conference and no news to come when you don't have one. but, is that a good expectation? and is there any thought to starting to have a press conference at every meeting? >> so i would really like to discourage that expectation. every meeting that we have is a live meeting at which the committee could make a policy decision and we will feel free to do so. so i would really like to strongly discourage the

expectation that policy moves can only occur when there is a scheduled press conference. and we have long had in place the ability to hold a press conference call rather than an in-person press conference and we did do so on a number of occasions in earlier years. so the committee clearly would want to be able to explain its reasoning as we begin the process of normalizing policy. every meet something live and if we were to decide at a meeting to begin to normalize policy, i expect we would, we would hold the press conference call. >> was there concern, steve liesman, cnbc. was there concerned expressed at the meeting, the signal coming from markets and a variety of

markets, lower oil prices, lower yields around the world was one of deflation and that risk was one that should perhaps overshadow the concern about inflation on the other side? >> well, thanks, steve. we're very attentive to global developments and certainly discussed them in the meeting. the very substantial decline we've seen in oil prices is one of the most important developments shaping the global outlook. it will have different effects in different regions and could well have effects on financial markets as we're seeing. i think the judgment of the committee is that from the standpoint of the united states and the u.s. outlook that the decline we've seen in oil prices is likely to be on net a positive. it is something that certainly

is good for families, for households. it is putting more money in their pockets, having to spend less on gas and energy and so in that sense it is like a tax cut that boosts their spending power the united states remains although our production of oil has increased dramatically, we still remain a net importer of oil. of course there may be some offset in the form of reduced drilling activity and possibly some change, some reduction in cap-ex plans in the drilling area. but on balance i would see these developments as a positive from the standpoint of the u.s. economy. with respect to deflation, we see downward pressure on headline inflation from

declining energy prices. we certainly recognize that is going to be pushing down headline inflation and may even spill over to some extent to core inflation but at this point although we indicated that we're monitoring inflation developments careful we see these developments as transitory and the committee continues to believe, especially with the improvement we're seeing in the labor market, which we expect to continue, that inflation will move back up to our 2% objective over time. as i indicated we will want to feel believe that people will expect to feel reasonably confident about that when the process of normalization begins but we do expect them to be transitory. >>. robin harding from the financial sometimes.

madam chair, there is a big gap between the pace markets expect you to raise interest rates and the rate you have indicated in your thought plot. our markets misunderstanding your intentions? >> so that's difficult for me to say. what i want to say is that our objective is to communicate as clearly as we possibly can about our plans and how we see the economic environment unfolding. when the participants in the committee allude their projections, they're asked to give the path of the federal fund rate, and of the various economic variables that they consider most likely. they're not asked to talk about all the different things that could happen, recognizing there is uncertainty, and the paths of fund rate that they would

consider appropriate if those other alternatives were to happen. but other alternatives i think are priced into the market. and, one reason that the market prices may be different than the committee's is because they place probability on other outcomes that look different than what they regard as the model forecast. they may also have a different set of expectations about how the, about the economic outlook and how it's likely to unfold. so i recognize that there are significant differences. i can't tell you exactly what they're due to. but what i do want to do is communicate as clearly as i can on behalf of the committee how we think the economy is likely to progress and how we would likely set the federal fund rate over time, if that forecast bears out.

>> does it make you uncomfortable where markets are now? >> there are aller in of different factors that are bearing on the path of market interest rates. i think including global economic developments. it is off then the case that when oil prices move down and the dollar appreciates, that, that tend to put downward pressure on inflation compensation and on longer-term rates. we also have safe haven flows that may be affecting longer-term treasury yields. so i can't tell you exactly what is driving market developments but what i can say is we're trying to communicate as clearly as we can. >> steve from

"the washington post." i was hoping you go into a little more detail about the oil effect. even though you see it as transitory does that give you a little more room to keep rates low in the next few months? alternatively if prices bounce back what is that growing to do to your ability to change rates and how might you react to that? >> well, i, i'd say you know, that i think >> well, i think what we've seen since the mid 80s is that in an environment where inflation expectations are well anchored, that movements in oil and commodity prices and import prices tend to have transitory effects on the inflation outlook. there were many years in which we had unanticipated increases in oil prices, really beginning in 2004 and 2005, that put upward pressure on headline

inflation and sometimes even spilled through into core. and typically, the committee looked through those impacts on inflation with the view that they would be transitory, and i think experience bears out that they were transitory. and i think that's the committee's expectation here. inflation, even core inflation, has been running below our inflation objective. movements in oil later up will move inflation around, certainly headline inflation, but the committee at this point anticipates those impacts to be transitory. as long as participants feel reasonably confident that the inflation projection is one where we expect to meet our 2% objective over time.

that's what i think they'll be looking at things as we decide on the path for the funds rate. >> danny apple balm, "new york times." does the couple mean sgoshgs when you talk about reasonable confidence and inflation expectations, you can elaborate what it would take to give you reasonable confidence that inflation is headed back to 2%? >> so, a couple, i believe, the dictionary means a couple means two. so a couple means two. and with respect to inflation -- our forecast for inflation and inflation expectations, let me start by saying, i think it's important that monetary policy be forward looking. the lax in monetary policy year long and therefore the committee has to set the federal funds rate looking into the future. theory is important

and theories that are consistent with historical evidence will be something that governs the thinking of many people around the table. typically, we've seen that as long as inflation expectations are well anchored, that as the labor market recovers, we'll gradually see upward pressure on both wages and prices, and that inflation will tend to move back toward 2%. i think historically, we have seen, as the economy strengthens and slack diminishes, that inflation does tend to gradually rise over time. and as long as -- you know, just speaking for myself that i will be looking for evidence

that i think strengthens my confidence in that view and, you know, looking at the full range. it's likely to be the decision based on forecast and confidence in the forecast. >> michael flaherty reuters news. a lot of fo a lot a lot of folk of the focus has been left off and what would be the path after you make the first move? >> i think you raise a very important point, because although there is a great deal of market focus on the timing of liftoff, what ought to matter in thinking about the stance of policy is with the entire path ofnt