This meeting. Trish it will be two more this year. I want to bring in the whole panel for reaction. Adam dunn and Wealth Management president kimberly, and steve cortez and lori rothman. Lori has reaction on the floor of the Stock Exchange which we gained 30 or so points. This is as people anticipated, there is a market that like to have some reassurance knowing they were right. You hit the nail on the head, the dow is up 75, it was up 35 points. The vicks has been down 5 today so market got exactly what it was expecting and more importantly the fed laying the groundwork for two more quarterdeck increases for the duration of 2017. There is the s p 500 up 0. 6 . A lot of buzz on the floor, trades being made, everyone dipping in. The question is janet yellen takes a press conference, asked about trumps taxcut plan and for Monetary Policy. Trish we will keep checking in with you. Do they need to do this . They need to do it, Mission Accomplished at the fed. Lot of people working, full unemployment and they have price stability, we have both, time to get back to normal rates and they are doing that in a slow, deliberate, steady way. Trish i will go to steve to weigh in on this. Why move right now when inflation is as it is . The jobs market is improving. And put on the brakes. Thank gdness we can extricate ourselves from this monetary nightmare we have been in so long because we have growth and optimism and investment and wages, nowhere near where they should be. The American Worker had a not had a pay increase since 2000 but the trend lately trish way not let that go a little . I have my reasons for thinking they shouldnt but why not let it breathe a little bit . A fair question, the fed has paradoxically depressed Economic Growth through keeping Monetary Policy this lacks for so long. What we needed Interest Rates to rise for the right reason and they are rising for the right reason which is wages are finally picking up, Financial Markets are probably forecasting that inflation will pick up, something we desperately need. This is the right time for the fed to remove itself which i hate the artificiality of Central Banks running global economies. Trish i agree with you and adam does as well. You run the risk of having false incentives and got central bankers out of there and kimberly, when you think about it a lot nothing out of washington, they couldnt tie their shoes and that is why central bank had to be so aggressive. Janet yellen had no choice. To prevent the economy from going off the cliff she needed to be proactive, no longer needs to be as proactive. Behind the curve for some time, they dont want to find themselves in that situation of growth happens too quickly. I agree with the other panelists. We have this growth in the economy and new jobs coming in and inflation is the to present mandate. The reason they should raise rates, and they did and the real question again is trajectory and velocity they do it in the future. They mentioned it will be two more this year, possibly three next year. In 2019 around 3 , long way to go. They havto raise rates at this point to keep stability in the markets and the markets like stability, they like to have prediction what is coming forward. Trish she had everyone over the head with it. A couple weeks ago, clearly signaling this is what she is going to do. He wants no surprises, doesnt want anybody to be surprised, heres what is happening and why i am doing it, shes laying out the case that has been crystalclear, there is a subtle text going on, trump has backed off on janet yellen because he made clear he thought we needed to get back to higher rates and she said the same thing, allowing everyone to step back, have a little breasts, space and janet yellen can do her job, trump can do his and the markets love that. Trish we are up 100 points so investors like what they see from the fed. Janet yellen will be speaking in 30 minutes. A few more clues what she will be doing going forward. Regarding trump and yellen they are unwitting allies. Neither likes the other, trump has been public about his criticism and i doubt yellen has a high opinion of President Trump but they are helping each other in different ways. The president s policies of deregulation and tax reform have so convinced markets and the world that we can grow again it is giving the runway for janet yellen to raise Interest Rates. Trish she has got to be thanking her lucky stars she got someone who wants to engage in fiscal policy for a change. The weight has been taken off her shoulders was no longer are we asking central bank to do all the work, we have a congress that will pass reform, open the door for Small Business to grow which is why you have Small Business optimism at a 14 year high. Trish you are very confident in congress. I like that confidence. We will talk to Kevin Mccarthy about whether they can get anything done but back to peter barnes, did she mention anything about donald trump and the trump optimism seeping into the markets . We expect she will discuss that at the press conference and we will ask about that but as far as the Economic Forecast, there is nothing that suggests at least so far they expect any stimulus from the trp administraon. They have gdp growing at 2 this year, to present at 2018 and 2t until there is more clarity on policy from the administration. Trish one of the things that makes me nervous about central bankers stirring the pot, typically they get it wrong. They are either too early or too late, they very rarely get the timing on this right. I dont know whether she thinks anything will come out of fiscal policy in washington or not, but how do you center this in knowing historically it is wrong . The guy who works at the Market Strategist if i have a forecasting record like the fed i would have been fired a long time ago but government workers dont get fired. Most central bankers around the world particularly for our fed are academics. This is an mit cabal, not people who live in the real world, these are the actual bankers, they are central bankers, they havent managed investment. They havent paid a payroll so they dont understand the world terribly well. They live in an academic generally liberal leaning bubble so that is one of the reasons they cant forecast what is going on in the economy. Trish let me jump in and say i think to present is very modest. Of trump is successful on healthcare front and taxes you will feel a lot better than to present. Because of the policy the American Economy is like a runner that has been wearing a weighted vest imposed by the city i am in right now, washington dc and taxes and regulation. The runner can sprint again as the economy should in this country, when we remove regulatory hurdles, the albatross that squeezes the economy to death, when we remove these hindrances. Trish adam has been clenching numbers on this. Earnings could go through the roof once you get rid of so of the taxes companies have been burdened with. We have been struck and no mans leading corporate earnings, s p 500118 points, things are percolating, the estimates are for 128. Trish our companys growing sales or is it because they are becoming more efficient . No. The efficiency thing with a couple years ago. We have gone past that. Not just increasing margins by lowering costs but the top line, Global Economy percolating. Trish this is important, real growth. The reform you are talking about is in addition to that. Not only are earnings going from 118 to 128 but you get the general reform, to 135, 140, that is the excitement. When people talk about animal spirits that is what they are talking about. Trish we see them at the Stock Exchange is markets are up 86 points. Lori rothman, what are traitors telling you in terms of whether this is good or trumps policies are good. Reporter lets get past the healthcare hurdle, it is all about tax reform. The dow is up to 92 point gain. I took a moment while you were chatting to look at fed fund futures for the duration of the year so the percentage we will see a hike is up 87. 5 june. That is the next press conference meeting, 37. 6 . Another Market Reaction interesting is the 10 year yield and 30 year yield came to one week lows after the decision, looking at the benchmark 10 year yield at 5 or 6. Trish what do you make of that . Rarely do you see a situation where real money has to deploy capital and exceedingly long versus speculative traders, shortterm guys are exceedingly short. You have go back 5 years where you see them perfectly paired off. The shorts are getting squeezed because people deploy capital putting money to work, feel good about this economy putting capital out there which means they are getting squeezed, the to you down even as the fed is raising rates. Trish janet yellen is about to speak again in the next 15 minutes. What are you listening for . I am asking her to be constant and stable about the rate increases, no other hidden agenda that they may tighten more, refunding on the Balance Sheet and something in that regard, something that would aspect the market but as long as we are confident and increasing them september again, this is good for the market and good for the little man out their too. The small investor. I see that every day. My clients, Small Businesses, they are euphoric about this growth and that changes the sense of trust. What if coming out of washington will be put into fruition and that will have fundamental growth . When you have fundamental growth the economy grows and earnings grow and that means stocks grow and investors portfolios grow, 401 k s and everything is good and that is what we want. We want to create wealth in this country. Trish folks like nancy pelosi so resistant to any Economic Policy change that would be meaningful for Small Business owners, small investors. Business at the end of the day keeps everyone employed, not government as much as nancy pelosi would like you to think and important that we as a country shift our mindset so we are not freaking out about the possibility that government might get smaller when it should be business that gets bigger. Amen. I am at the Us Hispanic Chamber of commerce washington summit. This is a group that by and large oppose donald trump, endorsed Hillary Clinton and active in the campaign against trump. Having said that in Conference Today talking to individuals, the excitement is palpable with his administration and people who politically dont like donaldru economically realized. Trish eet in new york, new york is a place that is not terribly friendly on the streets of manhattan to our new president even though he is from here but you talk to people on wall street and they will say maybe i dont like him but i love his policies. That is important because it shows you they have their trepidations about him in other areas, they really feel the heat, understands business in a way we have not seen in washington. Finally, yes, we have a businessman, business person in the white house and number 2, thank god Hillary Clinton is not president because we would right now be sitting in on Elizabeth Warren would be sitting on a diet washington and we would be talking about how shes crushing the banks and how will he ever get a loan . Trish steve cortez wants to say amen to that but some bankers i saying amen to that as they watched their stock prices increase because there is no longer that threat that you said Elizabeth Warren coming down on them. One thing people forget is as much as you want to demonize the banks, you need a bank to get a loan and you want them lending to people because that is what has this economy ticking. We are waiting on janet yellen who will be taking questions from reporters and giving us insight into what went into the feds thinking. We will be back with the chair of the Federal Reserve and more commentary as well as Kevin Mccarthy next. Why pause a spontaneous moment . Cialis for daily use treats ed and the urinary symptoms of bph. Tell your doctor about your medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, or adempas® for pulmonary hypertension, as this may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. 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Trish janet yellen will take some questions and give some insight into what went into the feds thinking. We have a rate hikes, another one which is important because it shows the fed thinks this economy is stable enough, is growing enough that it can be in an Interest Rate rising environment in the future. She said there would be two more this year and reporters want to know when and why. I am sure she will say some questions about donald trump and how he is impacting the feds decision. We have already seen in our economy, joining me with a look at that, the republican Healthcare Plan, House Majority leader Kevin Mccarthy, california congressman mccarthy, good to have you here, with one to until. I want to start with the fed. How do you interpret todays quarterdk a ke . What does it tell you about our economy . The fed thinks this economy is strong but i feel different. Maybe it is the rise of what is happening in the market based on a new administration seeing a difference when it comes to regulation and others but makes me nervous when the cost of capital gets higher. More importantly the cost of what our debt is to the American Public am Interest Rate goes up higher, the cost is more an interest. Trish would you prefer to have the fed keep the powder dry, take a waitandsee approach and how the academy flips out without any inflation before they move. I would rather wait a little longer. I do know what we are doing on rate reform. If we are successful with healthcare that takes away the 30 hour work week with 50 employees as well that harmed this economy and that will help Small Business. And that is the best thing for the economy. And it is supported on these ideas. And what is your thought given the division we have seen in the Republican Party on repeal and replace. I see it moving through. Understand why we are here, obamacare is failing from the exchange to the expansion of medicaid, one third of the counties and one provider, 18 of 23 coops of collapse, premiums continue to rise. And three phases this is the first phase, the cbo says premiums will be lowered, that is great and the American Public could choose themselves their healthcare, not government dictating where Healthcare Plans have to provide. That is great start and it passed two committees already, every republican voted for it and we will move it through the Budget Committee and rules and onto the floor and then it goes to the senate and i hear from a lot of senators the great thing is they are legislators as well, they can offer amendments, make changes. Trish there can be tweets. Sounds like you are willing to negotiate on that front which is encouraging, when we talk about timetables august is when the market is hoping for tax reform. The treasury secretary told neil cavuto it will be signed, sealed and delivered. A lot is dependent on healthcare reform. Do you think you can get it done in time . Yes i do. Once we solve healthcare we are repealing those taxes. This is the repeal wdid last year but also the replacement which we promised the American Public we would do. The taxes lower the base by 1 trillion. And trish donald trump in nashville tonight will sell this plan, they are stumping for it. Will it come down to him . How does paul ryan fit into this . Do you need the leadership of the president to get to members of the party back in line . We are a team. I was talking to the president yesterday along with the speaker, talking to the Vice President today. We are a team laying out a plan, a Healthcare Plan that works and empowers the individual and lower the premium and that is the bill we have. With all of us working together we can get it through. I would hate to see the idea that others say just repeal it because it would double the premium and take away the subsidies and collapse the market and he would sit around trish you have to get it right. There is a lot at stake here, you cant do it in a halfway approach. Congressman mccarthy, good to see you, i wish we had more time but i have to get to janet yellen. Breaking right now, fed reserve chair janet yellen is expected to take the podium any minute. You are looking at the live picture as we wait for her and we are joined by adam johnson, steve cortez, laurie rothman. One thing reporters will hammer on steve cortez, is how much is she thinking about donald trump . You heard Kevin Mccarthy say he is nervous about raising rates in this environment. We havent seen all the proof. He wants more numbers, more data to show this economy is back on track before the fed makes it more expensive to borrow. I dont often disagree with the congressman but i will in this case, time to take the training wheels off, past time to take the training wheels off. The main reason we can is because of the new occupant of the white house, we have a president who understands business, his life has been about business and he knows the business of growing America Needs to be addressed through regulatory and tax reform. We are going to get those through congress, it is messy and ugly at times, the process, the sausage making of legislation but we are going to get it through in the Financial Markets already believe that by the way and are pressing it in. Trish w mccarthy saying we need rates low . I can understand the point of view of being a politician why he would say that was a politician would rather see like jenny on herself economy run a little hot. He would rather create, quote, too many jobs and growth accelerate too fast rather than the opposite. You would rather err on the side of caution and let things run a little hot so i understand why he would take that point of view but time to get back to normal. Trish it has been this way too long and the effect of that is unintended consequences. Banks dont want to lend, dont need to land because they wont make money on that loan. In order to incentivize the system to work as efficiently, there needs to be a bit of a reward for the lenders themselves in the way of higher Interest Rates. Kimberly, a lot of people are worried about yields and this is something the congressman expressed, his concern is it gets too expensive to borrow and lord knows we have done a lot of it, how do you, to skyrocket . We are not concerned about that. The fed laid out a methodical plan and the mandates are being hit, being met so there is data to base this rate hike on and as long as it continues, that continues, we will be able to do that in june as well. Not to mention lori is down on the floor with us you are talking about potential info structure spending and thats gonna matter. You look at some of these stocks and interests in the structure space they stand to rally based on plants that we are hearing about the white house wants to bring those forward. Is a there is a lot in the mix. The cool thing is the mike market is rallied because they are moving in the right direction and better than that they are just firing on all cylinders. With a great that your jobs report and everyone is really excited to see what someone is shaking her have in agreement. It is simple. The economy is good so the feds can raise rates. We will get some insight into what went into her thinking lets listen in right now. Good afternoon. Today the federal open Market Committee decided to raise the target range for the federal funds rate by one quarters percentage point bringing it to three quarters to 1 . Our decision to make another gradual reduction in the amount of policy accommodation reflects the economies continued progress towards the employment and price stability objectives assigned to us by law. For some time the committee has judged that its Economic Conditions involved as anticipated gradual increases with the federal funds rate would likely be appropriate to achieve and maintain our objectives. Todays decision is in line with that view and is not represent a reassessment of Economic Outlook or of the appropriate course for Monetary Policy. I will have more to say about Monetary Policy shortly but first i will reveal recent economic developments in outlook. The economy continues to expand and a moderate pace. Solid income gains in relatively high levels of Consumer Sentiment and wealth had supported Household SpendingGrowth Business investment which was soft for much of last year has affirmed somewhat. Business sentiment is at favorable levels. Overall we continue to expect that the economy will expand at a moderate pace over the next few years. Job gains averaged about 200,000 per month over the past three months maintaining the solid pace we have seen over the past year. The Unemployment Rate was 4. 7 in february near its recent low. Broader measures of labor market underutilization also remain low. Participation in the labor force has been little changed on that for about three years. Given the underline down were trent a participation spending largely from the aging of u. S. Appellation of relatively Participation Rate is a further sign of improving conditions in the labor market. Looking ahead we expect the job conditions will strengthen somewhat fther. Turning to inflation, the 12 month change in the pric index for personal consumption expenditures rose to nearly 2 in january. Up from less than 1 last summer. That rise was largely driven by Energy Prices which have been increasing recently after earlier declines. Core inflation which excludes volatile energy and food prices and tends to be a better indicator of future inflation has been changed in recent months at about one and three quarters percent. We expect core inflation to move up and in overall inflation to stabilize around 2 over the next couple of years in line with our longer run objective. Let me now turn to the Economic Projections that were submitted for this meeting by Committee Participants. As always participants condition their predictions on their own individual views of appropriate Monetary Policy. It in turn depends on each participants assessment of the many factors that shape the outlook. The median projection for growth with the adjusted Gross Domestic Product was 2. 1 this year in inches down to 1. 9 in 2019. With the longer run rate. They stand say that for a half percent in the fourth quarter. It remains at that level over the next two years modestly bew the longer run normal rate. Finally the median reflection projection rises to 2 in 2018 and 2019. These Economic Projections are very little changed from those made in december. Returning to Monetary Policy the modest increase in the federal funds rate is appropriate in light of the economies solid progress towards the goals of maximum employment and price stability. Even after this increase on a terry policy remains accommodative thus supporting the further strengthening and the job market and the sustained return to 2 inflation. Todays decision also reflects our view that waiting too long to scale back some accommodation could potentially require us to raise rates rapidly sometime down the road. Which in turn could risk disrupting Financial Markets and pushing the economy into recession. The ongoing strength of the economy will warrant gradual increases in the federal funds rate to achieve in maintain our objectives. That is based on our view that the neutral phenomenal federal funds rate thats the that the Interest Rate that is neither expansionary nor contractionary and keeps the economy operating on an even keel his road by political standards it means that the federal funds rate does not had to rise by all that much to get to a neutral policy stance. We also expect the neutral level of the federal funds rate to rise somewhat over time meeting the additional gradual rate hikes are likely to be appropriate over the next few years to sustain the economic expansion. Even so the committee continues to anticipate that the longer run neutral level of the federal funds rate is still likely to remain below levels that prevailed in previous decades. This view is consistent with disciplines projections of appropriate Monetary Policy. The projection for the federal funds rate is 1. 4 at the end of this year. 2. 1 percent at the end of next year and 3 at the end of 2019. In line with its estimated longer run value. Compared to the projections made in december the meeting cap for the federal funds rate was essentially unchanged. As always the Economic Outlook is highly uncertain and participants of the appropriate cap for the federal funds rate in response to changes to their Economic Outlooks and abuse of the risk to their outlooks. The outlooks. Changes in economic policies including physical and other policies could potentially affect the Economic Outlook of course it is still too early to know how these policies will unfold. Moreover fiscal policy is only one of many factors that can influence the outlook. In making the right decisions we will continue as always to assess Economic Conditions relative to our dual mandate. As ive noted previously policy is not on a preset course. Finally, we will continue to reinvest proceeds for maturing Treasury Security in principal payments from agency debt and mortgagebacked securities. This policy by keeping the committees of longerterm securities as sizable levels has helped to maintain accommodative Financial Conditions. As a matter of prudent planning we discussed it at this meeting the number of issues related to an eventual change to the reinvestment policy. We made no decisions and we will continue our discussion at subsequent meetings. In keeping with the principles in the normalized dodgy it will be gradual and predictable. We will provide more information about our plans as it becomes available. Thank you. I would be happy to take your questions. I would be happy to take your questions. On the last topic the Balance Sheet normalization. You dont want to stop pulling that in the in until the normalization is well underway. Could you give us some sort of sense about what went underway. At least in your mind. What kind of Economic Conditions would you like to see. Is it just a matter of the federal funds rate has been the main issue. And what kind of role do you see the role of the Balance Sheet playing in the normalization process over the longer term. Is it an active tool or a paive tool. Let me start with this. The second question first. We have emphasized for quite some time that the committee wishes to use variations in the Feds Fund Rate target as our key active tool of policy we think it is much easier in using that tool to communicate the stanza policy. We have much more experience with it and have a better idea of its impact on the economy. While the Balance Sheet asset person says our tool that we could conceivably resort to if we found ourselves in a serious downturn where we were again up against the zero amount and faced with a substantial weakness substantial weakness in the economy its not a tool that we would want to use as a routine tool you ask what well underway means. I can give you specific answer to that and i think the right way to look at it is in qualitative and not quantitative terms. It doesnt mean some particular cutoff levels for the federal funds rate that when we reached that level we would consider ourselves well underway. I think what we want to have his confidence in the economies trajectory a sense that the economy will make progress that we are not overly worried about Downside Risks it could quickly after setting it off on the path to shrinking the Balance Sheet gradually over time causes us to want to begin to add Monetary Policy accommodation so i think it has to do with the balance of a risk and confidence in the Economic Outlook and not simply the level of the federal funds rate. Thank you. You mentioned that you want to not had to rate raise rates rapidly. Gradual has been very gradual could you describe what a rapid rate of increase is and how that should be understood. So, im not sure that i can tell you what a rapid rate of increase is. I think the trajectory that you see as the median and our projections which this year looks to a total of three increases that certainly qualifies as gradual my comfort in using the term gradual comes back in part to my judgment that the neutral level of the federal funds rate namely the level of the federal funds rate that would keep the economy operating on an even keel a rate where we neither a pressing on the break the level of Interest Rate is quite low. At present i see Monetary Policy is accommodative namely the current level of the federal funds rate is below that neutral rate. But not very far below the neutral rate. We reached those objectives. We see the risk to the outlook. That has been our assessment for the last several meetings. It looks to us to be appropriate to gradually raise the federal funds rate back in the direction of neutral and exactly how many increases is that . Does it give you a sense of what Committee Participants envision in the concrete sense. If it is one more or one last i think that still qualifies into my mind. I think if you compare it to any previous tightening cycle i remember when rates were raised every meeting starting in mid 2004 and i think people thought that was a gradual pace measured pace. We are certainly not envisioning Something Like that. Steve from cn bc. In part because of the u. S. Because of the policies expected from the new ministration. Yet they take it from the comment at the very beginning that these forecast today have a noaa reassessment. Have they discussed what posse might look like in the event that there are large tax cuts passed wherever structure spending past . And what might the policy look like if the policies become law. Not discussed in detail potential policy changes that could be put in the place and we have not tried to map out what our response would be to particular policy measures we recognize that there is great uncertainty about the timing, the size and the character of the policy changes. A set of decisions. That we need to make before we know more about the policy changes and they will go into effect. While some participants have a penciled in some fiscal policy changes into their projections the basis for todays decision are simply the assessment of the economy against our longest established goals. A maximum employment. There is nothing in the has done. With the preemptive responses. We have plenty of time to see what happens. We did it remove the word only in a Statement Today from gradual, i think this is something that should be over interpreted it was a relatively small change and think it is appropriate for you to consider it in the context for example for the example that they are virtually identical to those that we issued. They essentially are unchanged. In terms of the path of the economy and the path of the federal funds rate. We had carried out a modest adjustment of the federal funds rate because weve seen the economy progressing over the last several months. In exactly the way that we it is beta. We havent changed our view about where the economy is heading or the risks if the economy progressed it has been doing great. We have the confidence in the path that the economy is on. If we continue to feel that we will likely regarded as appropriate to make some for their moves to scale back accommodation to move towards the neutral along the lines in the sep. There is surprises of Economic Forecast can change. They emphasize that if they continue in the manner that they been going now for quite some time we think the gradual increases in the federal funds rate will be appropriate and this is not a significant thing. Peter barnes, foxbusiness. Have you have a chance to meet with the new treasury secretary get and when will you meet with him. And have you have a chance to talk to president present trump yet or meet with him. I have met a couple of time with the treasury secretary and im getting to know him i think it is traditional for fed traders chairs and secretaries to meet on a regular basis i fully expect to have a strong relationship with him. About the economy and the regulatory objectives. With the Global Economic developments and i look forward to continuing to work with him. I was introduced to the president i have a very brief meeting and appreciated that as well. You said that the neutral level of the federal funds rate is quite low. How close you do it and what do you anticipate will be pushing up the neutral Interest Rate over the next few years. I have given a number of recent speeches on the topic i had developed my views. More fully i would say over the longer run that means going several years out i think the evidence suggests that the neutral rate may be something in real terms that might be close to 1 or a little bit under that. That would be consistent with the median longer run value. Of the federal funds rate in our Economic Projections for the last several meetings. 3 in the longer run. Normal federal funds rate that participants estimate in real terms with the 2 inflation objective. I indicated. Why is it so low. Its very strong evidence that is a chelated that this rate has been falling not just in the United States and many advanced nations and the decline probably predates the financial crisis i think in part reflects slowing publishing growth and also slow productivity growth here in many other advanced nations. Some recent work suggests that at the present time the neutral rate is lower than that. And some estimates place it around zero. In real terms. I think the lower current rate arguably reflects headwinds that are left over from the financial crisis and one form of have went i think has been caution and restraint and risk aversion on a part of households and businesses that have held back spending decisions in i suppose my judgment will move up over time and reflects a notion that part of that will gradually dissipate over the years. So that is a sense of where i think. There is uncertainty about the neutral rate. I can be affected by shifts in fiscal policy and how the neutral rate is expected that really depends importantly on the nature and the size of the fiscal shift in the effect it has on demand and supply in the economy. Thank you. Between the release of the minutes of the previous meetings from last month and the speech in chicago from last month Market Expectations about an increase in rates today have changed quite dramatically. What happened over the course of those few weeks. They were far more interested in signaling the idea of a raising rates at todays meeting and why do you think the market was so out of sync with where the central bank was. When i look at our sequence of communication theseem to me to have been reasonably consistent over this entire time we have indicated in december that we sought the risks is balanced and if the economy continued to progress along the lines we expected that several rate increases would likely be appropriate the minutes of our january meeting indicated that many participants thought an increase in the funds rate would be appropriate fairly soon if things continue along those lines. I indicated in my congressional testimony that i thought indeed the economy was progressing in line with our expectations. And as i think all of us having the expectation that if the economy continued to progress along the lines that we expected and we continued to see the risks as balanced it is due regarded to remove accommodation that is in place. By having several Interest Rate increases this year as we sought the data that continues to come in in line with our expectations my colleagues and i spoke out and indicated that indeed it continued to be our expectations when you ask me how do we get out of sync with the market this is something that i tried to reflect on a bit in the remarks that i made in chicago. And of course it is true that in 2015 and in 2016 we raised the federal funds rate only once. The Market Participants have been influenced by that pattern i did try to explain the reasons why we have moved so slowly during those two years and it reflects a set of shocks partly emanating from the Global Economy and risks that we sought to the outlet as well as more fundamental assessments pertaining to the neutral level of the federal funds rate in the longer run normal level of the rate i think they are reasons. We understand that we are getting closer to reaching our objectives the policy is accommodative that although the level of the neutral federal funds rate is probably quite low. We have in accommodated stanza policy. It will be appropriate to gradually move towards a neutral stance. If we continue on the path we are on. The bank for International Settlement has raised concerns that they are being attentive to asset price inflation. In the stock Market Investors in the nine states certainly dont seem to be waiting for that Trump Administration to influence the policies. How much of a concern is that for you and if not why not given the remarkably elevated level of stock prices. We do look at Financial Conditions and formulating a view. In stock prices do figure they do figure Financial Conditions. I think the higher level of stock prices is one factor it looks like it is likely from what the consumption spending is. We also noted in the last several months that it spreads for lower grade corporate issues. It has narrowed. Is another signal that the Financial Condition has become. On the other side a longerterm Interest Rates are up some in recent months and the dollar is a little stronger. There are privatesector analysts that produce the Financial Conditions indices that attempt to enter aggregate all of these different factors affecting Financial Conditions in for some of the more prominent analysts and indices i think the conclusion we had reached is that Financial Conditions on balance has eased and thats partly driven by the stock market. That is a factor that protects outlook the associated press. You will be meeting with your colleagues in germany this weekend. The Group Assessment is gonna be that its finally out of the words doing better. Do you think there will still be worries about risks. The feds might raise rates too quickly. I always exchange views on Economic Outlook and the development in our country. It will be my objective to exain u. S. Monetary policy and to try to make the same points to them that ive made here already today about what the outlook is. For the Monetary Policy in the United States. Either gets fair to say that the Global Economy is doing better. It is growing a bit more strongly than it was perhaps the last time i got together with my counterparts. The risks do somewhat more balance. Is a very significant amount of risk. I am sure that those will be discussed as well. You said you and your colleagues arent making assumptions about fiscal policy but many other people are. The business and community complex. It was at the highest level since 2005. Are you concerned about the effects on the economy and some of these policies on Infrastructure Spending dont get enacted or are delayed. We recognized last time that there have been an improvement in business and household sentiment. It is uncertain just how much sentiment actually impacts spending decisions and when it say at this point that i have seen hard evidence of any change in spending decisions based on expectations about the future. We exchange around the table what we learn from our many business contacts anything is fa