That that she spoke about the rate increase with reporters on wednesday. This is just under one hour. Ood afternoon. Today the federal open Market Committee decided to raise the target range for the federal funds rate by one quarter percentage point, bring it to threequarters, to 1 . Our decision to make another gradual reduction in amount of policy accommodation reflects the economies continue to progress with the employment and price stability objectives assigned to us by law. For some time to committee is judged that its Economic Conditions evolve as anticipated gradual increases in the federal funds rate would likely be appropriate to achieve and maintain our objectives. Todays decision is in line with that view and does not represent a reassessment of the Economic Outlook or of the appropriate course of Monetary Policy. I will have more to say about Monetary Policy shortly, but first i will review recent economic developments in the outlook. The economy continues to expand to a moderate pace, solid income gains and relatively high levels of Consumer Sentiment and wealth have supported Household Spending growth. Business investment which was sought for much of last year has firmed somewhat, and Business Sentiment is at favorable. 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 last 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 change on net for about three years. Given the underlying downward trend in participation stemming largely from the agent of the u. S. Population, a relatively steady Participation Rate is a further sign of improving conditions in the labor market. Looking ahead we expect the job conditions will strengthen somewhat further. Turning to inflation, the 12 month change in the price 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 shipping increasing recently after earlier decline. Core inflation which excludes volatile energy and food prices intends to be a better indicator of future inflation has been little change in recenmonths at about 1. 75 we expect core inflation to move up and overall inflation to stabilize around 2 over the next couple of years, in line with our longrun objective. Let me now turn to the Economic Projections that were submitted for this meeting by Committee Participants. As always, participants condition their projections on their own individual views of appropriate Monetary Policy which in turn depends on each participants assessment of the many factors that shaped the outlook. The median projection for growth of inflation adjusted Gross Domestic Product is 2. 1 this year and next, and edges down to 1. 9 in 2019 cups lightly above its its estimated longer run rate. The median projection for the Unemployment Rate stands at 4. 5 in the Fourth Quarter of this year, and remains at that level over the next two years, modestly below the median estimate of its longer run normal rate. Finally, the median inflation projection is 1. 9 this year, and rises to 2 in 2018 and 2019. These Economic Projections are very little changed from those made in december. Returning to Monetary Policy, the committee judged that a modestncrease in the federal funds rate is appropriate, in light of the economies solid progress toward our goals of maximum employment and price stability. Even after this increase, Monetary Policy remains accommodative, thus supporting some further strengthening in the job market and is 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. We continue to expect that the ongoing strength of the economy will warrant gradual increases in the federal funds rate to achieve and maintain our objectives. Thats based on our view that the neutral nominal federal funds rate, that is, the Interest Rate that is neither expansionary nor contractionary, and keeps the economy operating on an even keel is currently quite low by historical standards. That means that the federal funds rate does not have to rise by all that much to get to a neutral policy stance. We also expect a neutral level of the federal funds rate to riseewhat over time, meaning an additional gradual rate hikes are likely to be appropriate over the next few years to sustain the economic expansion. Even so, the committee continue to anticipate that the longer a neutral level of the federal funds rate is still likely to remain below levels that prevailed in previous decades. This view is consistent with participants projections of appropriate Monetary Policy. The median projection for the federal funds rate is 1. 4 at the end of this year, 2. 1 at the end of next year, and 3 at the end of 2019. In line with its estimated longer runs value. Compared with the projections made in december, and medium path for the federal funds rate is essentially unchanged. As always, the Economic Outlook is highly uncertain, and participants will adjust their assessments of the appropriate path for the federal funds rate in response to changes to the Economic Outlooks in views of the risks to the outlooks, changes in economic policies including fiscal 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 our 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 securities and principal payments from agency debt and Mortgage Backed securiti. This policy, by keeping the committees holdings of longerterm securities at sizable levels has helped maintain accommodative financial conditions. As a matter of prudent planning we discussed at this meeting a number of issues related to an eventual change to our reinvestment policy. We made no decisions and we will continue our discussion at subsequent meetings. In keeping with the principles that the process of normalizing our Balance Sheet with the gradual and predictable, we will provide more information about our plans as it becomes available. Thank you. Id be happy to take your questions. Thanks very much. Picking up on the last topic, the Balance Sheet normalization, clearly you said you dont want to start pulling in and tell normalization is underway. Could you give us some sort of sense about what well underway means, at least in your mind . What kind of hurdles are you setting . What kind of Economic Conditions would you like to see . Is a just a matter of the love of a shortterm federal funds rate as being 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 act of two or is it a passive tool clacks thanks. So let me start with the second question first. We emphasize for quite some time that the committee wishes to use variations in the fed funds rate target or shortterm interestrate target as our key active tool of policy. We think its much easier in using that tool to communicate best dance the policy people we have much more experience with it, and have a better idea of its impact on the eco. So while the Balance Sheet asset purchases are told we could conceivably resort if we found ourselves in a series downturn where we were again up against a zero bound and faced with substantial weakness in the economy, its not a tool that we would want to use as a working tool of policy. You asked what well underway means. I cant give a 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 toplevel for the federal funds rate that come when we reached that level, we would consider ourselves well underway. I think what we want to have is confident in the economys trajectory, a sense that the economy will make progress, that we are not overly worried about Downside Risks and adverse shocks that could hit the economy. That could quickly, after setting it off on the path to shrinking the Balance Sheet gradually over time cause us to want to begin to add Monetary Policy accommodation. So i think it has to do with the balance of risks and confidence in the Economic Outlook, and not simply the level of the federal funds rate. Thank you. You mentioned that, that you dont, you want to not have to raise rates rapidly if you were to fall behind the curve. In the current context, gradual has been very, very gradual. Could you describe what a rapid rate of increases should be, how that should be understood . So, im not sure that i can say what a rapid rate of increases is. I think the trajectory that you see is the median in 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 we keep the economy operating on an even keel, its a rate where we neither present on the break nor pushing down on the accelerator, that level of Interest Rates is quite low. So 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 are closing and i think on our employment objective b we are coming closer on our inflation objective. As we reach those objectives, rticularly in light of the fact that we see the risks to the outlook as roughly balanced at this point, and thats 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 about, you know, gives you a sense of what Committee Participants in vision in a concrete sense. But, you know, if its one more or one less, i think that still qualifies to my mind as gradual. I think if you compare it with any previous tightening cycle, i remember when rates were raised at every meeting starting in mid2004. I think people thought that was a gradual pace, measured pace, and we are certainly not envisioning Something Like that. Both the oecd and imf have raised their forecasts in part because of the u. S. Growth in part because of policies expected from the new administration. Yet the fed has not ended they get from your the very beginning that these forecast today represent no reassessment. Hasnt the committee discussed what policy mightook like in the event there are lae tax cuts passed or Infrastructure Spending past . And what might policy look like if those policies become law . Finally, why did you remove the word only before the word gradual when you talk about future rate increases . So we have not discussed in detail potential policy changes that could be put into place, and would 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, the character of policy changes that may be put in place, and dont think that thats the decision or a set of decisions that we need to make until we know more about what policy changes will go into effect. I do want to emphasize that while some participants have penciled in some fiscal policy changes into their projections, that the basis for todays decision is simply our assessment of the progress of the economy against our longest thats been long established goals of maximum employment and price stability. Theres nothing that we have done or anticipate that is a speculation. I think its fair to say theres nothing thats speculation about preemptive responses to future policy moves. We have plenty of time to see what happens. We did remove the word only in the Statement Today from gradual. I think this is something that shouldnt be over interpreted. I regard it as a relatively small change, i think its appropriate for you to consider it in the context, for example, of the fact that our Economic Projections are virtually identical to those that we issued in december. They are essentially unchanged both in terms of the path of the economy and the path of the federal funds rate. So we 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 anticipated. Havent in any way change our view about where the economy is heading or the risks. We have long said that if the economy progressed, and its been doing nicely i think in making progress and showing resilience and have some confidence in the path the economy is on. If we continue to feel that, we will likely regard it as appropriate to make some further moves to scale back accommodation to move toward neutral along the lines in the sep. Obviously there is a price of our Economic Forecast can change, but the word gradual i think emphasizes if things continue in the manner we have been going as weve said now for quite some time, we think that gradual, some gradual increases in the federal funds rate will be appropriate, and this is not a significant, this is not a significant change. Speaking of fiscal policy had get a chance to meet with the new treasury secretary yet, mr. Mnuchin . If not, when will you meet with them what you want to talk to them about . Have you had a chance to talk to President Trump yet or meet with him . If not, would you like to and would you and what would you talk about . Ive met a couple of times with the treasury secretary and then getting to know him. I think, you know, with traditional for fed chairs and treasury secretary sumit on a regular basis, and i fully expect to have a strong relationship with secretary mnuchin. Weve had very good discussions about the economy, about our regulatory objectives, the work of fsoc, Global Economic developments. And i look forward to continuing work th him. I was introduced to the president. I had a very brief meeting and appreciated that as well. Washington post. You said the neutral level of the federal funds rate is quite low. How close do you judge it to be to the inflation rate and what do you anticipate will be the force pushing up, the neutral interface over the next few years . Could fiscal policy be among those . So ive given a number of recent speeches on this topic where i 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 medium and longer run value of the federal funds rate in our Economic Projections for the last several meetings. 3 is the longer run, normal federal funds rate that participants estimate in real terms with a 2 inflation objective objective. Thats 1 in real terms. And ive indicated, why is a solo . Well, i think there is very strong evidence thats accumulated that this rate has been falling, not just in the United States, but in many advanced nations, and the decline probably predates the financial crisis. I think in part reflects slowing population growth and also slow productivity growth here and in many other advanced nations. But some recent work suggests that at the present time the neutral real rate is yet lower than that, and some estimates place at around zero in real terms. So i think the lower current rate arguably reflects headwinds that are left over on the financial crisis. One form of headwind i think has been caution and restraint and risk aversion on the part of households and businesses thats held back spending decisions. I suppose my judgment is that it will move up over time, reflects a notion that part of that will gradually dissipate over the years. So thats the sense of where i think. Now, there is uncertainty about the neutral rate, and as you mentioned it is, it can be affected eye shifts in the fiscal policy. How the neutral rates are affected by fiscal policy that really depends importantly on the nature, the size of the fiscal shift and the effect it has both on demand and supply in the economy. Thank you. Nick with the wall street journal. Chair yellen, between the release of the minutes of the previous meeting late last month and her speech in chicago earlier this month, Marke