Inflation will race back to its objective. This does not indicate that the committee has decided on the timing. June is not a lock. There is additional language here. The economic language suggests the fed has seen this operative recently. Thats this has seen this soccer data recently. Softer data recently. Resources continues to diminish. Household spending is rising moderately. Business specs business fixed inflation has the client declined. Marketbased measures of inflation compensation remain low. Longerterm Inflation Expectations remain stable. Inflation is anticipated to remain near its recent low level in the near term. The committee expect inflation to rise gradually over the mediumterm. The transitory effects of the committee continues to monitor inflation develop its closely. The vote here was unanimous by members of the fomc. The Interest Rate projections included at this meeting. They do that quarterly. The fed is they have scaled back their forecast for rate increases Going Forward. 15 of 17 policymakers think the first increase will happen this year. To believe that will happen in 2016. A big drop from the 1. 125 we saw in december. 13 of 17 policymakers have the rates under what percent by the end of the year. This under rates under 1 by the end of the year. Some of the Economic Projections for growth, unemployment and inflation come all of them coming down. Gdp change 2. 3two. 7 . 2016, 2. 32. 7 . They have acknowledged the improvement in the Unemployment Rate and inflation 2015 at 0. 6 . Core pc yetat 1. 4 . Somewhat of a mixed message. They are ready to raise Interest Rate but are not telling us when. Mark you are cooked joining us. Peter cook joining us. We are seeing a big turnaround on wall street. Scarlet fu has that part of the story. Scarlet fu those are u. S. Stock indexes. This big leg higher build a long as peter kept reading the headlines. We are coming down a little bit here. The dow industrials getting. 4 and the nasdaq advancing. 3 . The dollar extended its weakness with the euro popping 210 726 oil and gold paring their losses. They have come off their lows. Treasuries are higher. The twoyear yield currently at 50 basis points at the moment. The 10 year yield also coming down to its session lows. Let us get back to our fed learn table roundtable. Constance hunter, sebastian and Lisa Abramowitz. The headline as peter cook told us, patients language has been dropped. They are going to be patient and they told you they will be patient by what they tell you they are watching for. They will watch for signs of falling inflation is not transitory and they will watch for signs that we get continued quality of improvement in the labor market. How is the dollar reacting sebastian . Weakened a lot. The market is aggressive. Fx is a higher volatility asset class. It has over anticipated and will continue to do so. Over the next few days come with going to happen is people need to move back into the dollar. Shortterm is dollar down and equities up. Lisa abramowitz has been pouring over how the bond market is reacting. The twoyear yields dropped the most since january 30, 2015. Not that far ago. People are ratcheting back their expectations for when and how much the fed will hike interestingly if you look at futures trading, it does look like people are increasing the probability or their bets on the probability that the fed will hike in june. Not a huge move, but people seem to be saying yes, it is dovish. It will be measured pace. It still looks like june is on the table. You expressed some surprise when peter used the word unanimous about this. An interesting shift. We have a more dovish composition of voters. Even some of the more hawkish members have gotten on board here. That is very interesting. I suspect i have my suspicions about who is voting yes that was putting no before. It is a good development. Helpful for the markets that the fed is unanimous. What are they actually saying here . They are saying, look we will keep everything on the table keep looking at everything. What are they actually saying . What they are saying does not matter as much as what they want you to do. They want to stop strengthening because they see it as a potential threat over the longterm. They see the potential for too much tightening over the short term and they dont have to hike very fast. I have to pose a question to the panel. Is the pendulum swinging towards inflation . This depends on how it plays out with oil prices. We were having this debate during the break. We were just looking at a falling oil prices. Why have oil prices fallen . We had a supply shock and a demand fall from the rest of the world. The reason oil prices are low is not because we have low demand in the u. S. And not because we are experiencing problems in our demand. That should eventually translate into higher prices. People will have more disposable income to spend on those other things. The price of oil, does the fed be this is a problem for the overall economy . They probably see it as a good shock. It is a hit to a local sector in the u. S. I dont think it is anything bad. It is a pass of transfer of wealth from the rest of the world to the u. S. The bond market, people are making this company sold a record amount of debt recently who will have trouble refined to test have trouble refinancing will have trouble refinancing. We will be right back. Mark welcome back to bottom line special coverage of the feds decision today. Repeating our top story, the Federal Reserve has dropped assurance it will be patient in raising Interest Rates. And again air in its Communications Policy and opening the door for higher borrowing costs as early as june. We will bring you Janet YellensNews Conference in 15 minutes. Lets get back to our fed roundtable. Joining me this afternoon, Constance HunterSebastian Gailey and Lisa Abramowitz standing by with wall streets reaction, scarlet fu. What more reaction are we seeing on wall street from this latest news . Scarlet we are holding on to our gains. You can see on the chart behind me, following the fomc announcement we have continued to build on our advances. At the best levels of the session. It is pretty much across the board. The only sector not participating its consumer staples. Lisa just mentioned the higher rates in the credit market. Maybe a rush to refinance debt as well. For equities it would increase the cost of share buybacks for companies that tap the credit market in order to get cash to buy back their stocks. Which could mean less ability for companies to boost their earningspershare number. In the slowgrowing economy, there is struggle to grow revenue. Companies were able to engineer their eps by cutting costs and boosting their earningspershare through the effective share buybacks, which reduces the number of shares you need to boost that earnings number. Mark scarlet, thank you so much. Lets get back to our roundtable. What we are seeing is a drawback from the most aggressive states in the 100 year history of the u. S. Federal reserve. What is the Historic Context of this . What does this mean Going Forward . Constance in terms of the withdrawing of the quantitative easing . For our emerging markets, there is a big effect. We have had a huge amount of debt issuance over the past four years. Andy 7 trillion 9. 7 trillion. We have a big dollar debt issue around the world. The value of the dollar continues to increase. Repaying that debt becomes more difficult. A lot of these copies have dollar revenues but its something where that could be a concern for emerging markets. You will see higher rates in emerging markets. Mark how much of a concern . Sebastian this question of dollar to thdebt, it is more of a question of refinancing. Liquidity is like the sea and the sea is pulling itself out of the rest of the world into the u. S. The u. S. Is basking in liquidity coming from everywhere else. That is being retrieved from emerging markets. Yields have to back up and be higher. What theyre doing is letting their lisa the fed is putting june on the table. There has been a reversal because it looks like people are pushing back their expectations for rate hikes. A 10 chance of june. It underscores how they are paving the way for a june rate hike and yet their words are dovish enough, is being interpreted as them taking it off the table. Or being less committed to a june rate hike. They are more tempered in their discussion of the economy. Theyre clearly concerned about emerging markets. It comes back to us. How much can the u. S. Keep growing when the rest of the world is slowing so much . Constance we only get 12 of our economy from trade. We can keep growing pretty strongly while the rest of the world is slowing. Not that there is not feedback loops but we are definitely less affected by trade. Constance go usa. I completely agree. Dont underestimate the u. S. A lot of liquidity arriving here, so we lower oil prices. Mark when we return, Janet YellensNews Conference at 2 30 p. M. Washington time. Mark welcome back to bottom line special coverage of the fed decision on this wednesday march 18. My colleague, scarlet fu is standing by once again at the breaking news desk. Scarlet dow industrials posting another triple budget point move to the upside at what her 45 points 145 points. The dollar continues sinking and its session low versus the euro and the yen. By taking the word patience out, it suggests we are going back to watching every data point to guess when the next rate increase will come. My question is does good Economic Data mean the kleins inequities declines in equities or does good Economic Data support higher share prices because it reflects a stronger economy . This will be determined in the months and weeks to come. Mark what does it mean . Constance the fed is looking to take the air out of the balloon slowly. They dont want to pop it. They are also saying we will not do this until we know the engine is really firing on all cylinders. There is a good chance that we will see strong Earnings Growth in many sectors as the result of a relatively strong economy. There are many copies that benefit from having a low oil price. That will be an added boost to earnings. Mark the chief economist in chicago told the Associated Press the fed wants to prepare the markets for change but added they dont want to scare them. Our investors nervous right now . Sebastian they are incorrectly so. Look at what qe has done, you buy hope for the future and hopefully deliver that through Economic Growth. As the cycle slows down potential Earnings Growth has slowed down in the dollar cost increases, it becomes more of a difficult story. You have the wealth effect and the other side the substitution effect which is Interest Rates. If Interest Rates move too hard the entire system collapses on itself. There try to determine the volatility in Interest Rates so that the entire system does not selfdefeating self. Lisa this is one explanation for why the twoyear is rallying so much. The Federal Reserve, their median estimate they lowered it for the end of the year 20. 65 down from 1. 125 in december forecasts. End of the year to 0. 26 . Mark just quickly before we end this segment, when is the rate hike going to happen . In june . Constance it is data dependent. We will see a week First Quarter. Weak firstquarter. It will depend on the data. Im split between june and september. Sebastian the fed did exactly what we are expecting and we are still calling for a june rate hike. Watch for the labor to. Labor data. Mark thank you all so much. When we return, we will bring you Janet YellensNews Conference. Bottom line continues in just a moment. Mark welcome back to our special coverage of the feds decision on Interest Rates. Thank you for staying with us. The Federal Reserve dropping the word patient opening the door for higher bar when costs as early as june. The chair of the u. S. Federal reserve said to address reporters in washington. Lets go there live. Janet good afternoon. The federal open Market Committee did so afternoon this afternoon reaffirmed the current target range to the federal funds rate. We also updated our Forward Guidance, indicating an increase in the target range for the federal funds rate remains unlikely at our next meeting in april. With continued improvement in the Economic Conditions we do not want to rule out the possibility that an increase in the target range could be warranted at subsequent meetings. Let me emphasize that the timing of the initial increase in the target range will depend on the committees assessment of incoming information. Todays modification of our guidance should not be interpreted to mean that we have decided on the timing of that increase. In other words, just because we remove the word patient from the statement doesnt mean we are going to be impatient. Moreover, even after the initial increase in the target funds rate, our policy is likely to remain highly accommodative to support continued progress towards our objectives of maximum employment and 2 inflation. I will come back to todays policy decisions in a few moments but first i would like to review economic developments and the outlook which formed the policy for our decisions. We have c seen continued progress. The pace of employment growth has remained strong. With job gains averaging nearly 290,000 per month over the past three months. The Unemployment Rate was 5. 5 in february. That is 3 10 lower than the latest reading available at the time of our december meeting. Broader measures of junk Market Conditions such as those counting individuals who want and are available to work but are not actively searched recently and people working parttime but would rather work fulltime have shown similar improvement. As we noted in our statement slack in the labor market continues to diminish. Meanwhile, the Labor Force Participation rate the percentage of working age americans working or seeking work is lower than most estimates of its trend. Wage growth remains sluggish suggesting some cyclical weakness persists. So considerable progress clearly has been achieved but room for further improvement in the labor market continues. We continue to expect sufficient underlying strength in Economic Growth to support ongoing improvement in the labor market. After averaging 2. 5 over 2014 growth of real Gross Domestic Product it seems to have slowed. In part reflecting a moderation in household spending. In addition, the recovery in the housing sector remains subdued and export growth looks to have weeakened. We continue to expect moderate gdp growth with Lower Energy Prices and modest job gains. Inflation has declined further below are longer run objective. Largely reflecting the Lower Energy Prices i just mentioned. Declining import prices also restrained inflation. In light of the recent depreciation of the dollar will likely to do so in the months ahead. My colleagues and i continue to expect the effects of these transitory factors dissipate and as the labor market improves further, inflation will move gradually back toward our 2 objective over the mediumterm. In making this forecast, we are attentive to the low levels of marketbased measures of inflation compensation. In contrast, surveybased measures have remained stable. The committee will continue to monitor inflation developments carefully. This assessment of the outlook is reflected in the individual Economic Projections submitted to this meeting by the fomc participants. As always, each participants projections are conditioned on his or her own view of appropriate monetary policy. The Unemployment Rate projections over the next few years and in the longer run are generally a bit lower than the december than the december projections. The central tendency for the Unemployment Rate stands at fivefive. 2 55. 2 . Committee participants see the Participation Rate declining little further over the course of 2016 and 2017. For Economic Growth participants generally reduce their projections since december with many citing a weaker outlook for net exports. Nonetheless, the central tendency of growth projections for this year and next remains somewhat above estimates of the longer run normal growth rate. Finally, fomc participants project inflation to be quite low in this year. Largely reflecting lower energy and import prices. The central tendency of the inflation projections for this year is now below 1 . Down noticeably since december. As the transitory factors holding down inflation rebalance to 1. 71. 9 next year and rises to 1. 92 percent in 2017. Returning to monetary policy, as i noted at the outset, the committee reaffirmed its view that the current zero. 25 target range remains appropriate. With Economic Conditions improving and further improvements expected in the months ahead, we begin modify we have again modified our Forward Guidance. In december and january, t