Caution is the appropriate step for the Federal Open Market Committee to take when it comes to raising rates, Federal Reserve Board Chair Janet L. Yellen said Tuesday.
“Given the risks to the outlook, I consider it appropriate for the Committee to proceed cautiously in adjusting policy,” Yellen told the Economic Club of New York, according to prepared text released by the Fed. “This caution is especially warranted because, with the federal funds rate so low, the FOMC’s ability to use conventional monetary policy to respond to economic disturbances is asymmetric.”
…developments since the December meeting will slow the pace of rate hikes, she acknowledged, with “the median of FOMC participants’ projections for the federal funds rate is now only 0.9 percent for the end of 2016 and 1.9 percent for the end of 2017, both 1/2 percentage point below the December medians.”
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