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, Market Expectations about an increase in rates today have changed quite dramatically. At happened over the course of those two weeks to make ficials are more interested in signaling the idea of raising rates at todays meeting . And why do you think the market was so out of sync with what a central bank was . So when i look at our sequence of communications, they seem to me to have been reasonably consistent with, over this entire period. We had indicated in december that we expect how we saw the risks as balanced and if the economy continued to progress along the lines, we expected this summer rate increases would likely be appropriate. The minutes of our january meeting indicated that many participants thought that an increase in the funds rate would be appropriate fairly soon. If things continued along those lines. I indicated in my congressional testimony that i thought that indeed the economy was progressing along with our expectations. And as i think all of us having that expectation, that if the economy continued to progress along the lines that we expected, and we continued to see the risks as balanced, you regard it as appropriate to gradually remove accommodation thats in place. By having several inches rate increases this year as we saw the data continue to come in inline with expectations. My colleagues and i spoke out and indicated that indeed that had been and continue to be our expectations. Now, when you ask me how did we out of sync with the market, this is something i try to reflect on a bit in the remarks i made in chicago. Of course, it is true in 2015 and in 2016 each we rais raisede federal funds rate only once. And perhaps Market Participants have been influenced by that pattern. I did try to explain the reasons why we had moved so slowly during those two years, and it reflects i think i set up shocks partly emanating from the Global Economy and risks that we saw to the outlook, as well as more fundamental assessments, reassessments, pertaining to the neutral level of the federal funds rate, and the longer run normal level of the Unemployment Rate. So i think there were reasons but it is important for the public to understand that we are getting closer to reaching our objectives. The policy is accommodated, that although the level of the neutral federal funds rate is probably quite low, we nevertheless, have an accommodative stance of policy and it would be appropriate to gradually move toward atraleu stance ionf we ce the path we are on. The bank for International Settlements has raised concern that Central Banks are being inefficiently concerned asset Price Inflation and stock Market Investors in the United States certainly dont seem to be waiting for the Top Administration to implement its fiscal policies. I guess im just curious how much of a concern that is for you, and if not, why not given the remarkably elevated level of stock price valuation . Well, we do look at financial conditions in formulating our view of the outlook, and stock prices do figure into financial conditions. So i think the higherlevel of stock prices is one factor that looks like its likely to somewhat boost consumption spending. We also noticed that in the last several months that this spreads particularly for lower grade corporate issuers have narrowed, which is another signal that financial conditions have become somewhat easier. Now, and the other side, longerterm Interest Rates are some in recent months and the dollar is a little stronger. How does that net out . Are private sector analysts that produce financial conditions, indices that attempt to aggregate all these different factors, affecting financial conditions. And for some of the more prominent analysts and indices, i think the conclusion we have reached is that financial conditions on balance have used, and thats partly driven by the stock market. So that is a factor that affects the outlook. Marty crutsinger, associated press. You and secretary mnuchin will be meeting with your g20 colleagues in germany this week. What do you expect to find . Do you expect degrees assessment is good to be the world economies finally out of the woods doing better . Do you think they are still going to be worries about risk . Would one of those risk worries be that the fed not raise rates to quickly . Well, we always exchange views on the Economic Outlook in developments in our country, and it will be my objective to explain, explain 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 Monetary Policy in the United States. I think its fair to say that the Global Economy is doing better. Its a growing a bit more strongly than it was perhaps the last time i got together with my counterparts in the g20, that the risks do look somewhat more balanced, but they remain every set at significant risk mediumterm facing the Global Economy. Im sure those will be discussed as well. You said you and your colleagues are not making sumptions about the students of fiscal policy but many other people are, business and Consumer Confidence has jumped since elecon. Homebuilder sentiment today was at the highest level since 2005. Are you concerned about the effects on the economy if some of these policies such as tax cuts and Infrastructure Spending dont get enacted or are delayed . So we recognize our statement actually last time noted that there had been an improvement, a marked improvement in business and household sentiment. Its uncertain just how much sentiment actually impacts spending decisions. I wouldnt say at this point that ive 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, and i think its fair to say that many of my colleagues and i note a much more optimistic frame of mind among many businesses in recent months. But id say most of the businesspeople that we have talked to also have a waitandsee attitude and are very hopeful that they will be able to expand investment and are looking forward to doing that, but are waiting to see what will happen. So we will watch that and of course if we were to see a major shift in spending reflecting those expectations that could very well affect the outlook. Im not seeing it, im not seeing that at this point but the shift in sentiment is obvious and notable. Theres a perception out there that that that could semistand stand in the way of some of the Economic Growth policies that the new administration is pursuing. Given that the fed is projecting 1. 8 growth in the long run, is this a potential point of conflict for the fed and the new administration . So i dont believe it is a point of conflict. We would certainly welcome stronger Economic Growth in the context of price stability. If policies were put in place to speed growth that ive certainly urged congress and the administraon to consider policies that would boost productivity growth and raise the economys socalled speed limit, or potential to grow, i think those would be very welcomed changes that we would like to see. I will try to take the opposite side of this, because, at this question about Market Expectations and how the market has got things wrong and then how you say the fed suddenly clarified what already said. For example, if you look at the atlanta fans latest you to be tracked over the First Quarter its down to 0. 9 . We had a retail sales report that was next. What is the motivation here . The economy is so far from your forecast in terms of gdp. What is this signal that the rest of the year . Gdp is a noisy indicator. If the one averages through several quarters i would describe our economy as one that has been growing around 2 per year and as you can see from our projections, that is something we expect to continue over the next couple of years. Now, the pace of growth has been consistent with a pace of job creation that is more rapid than what is sustainable if Labor Force Participation begins to move down in line with what we see is this a longer run trend with an aging population. Now, employment hasnt moved that much in part because people have been drawn into the labor force. Labor force participation as i mentioned in my remarks has been about flat over the last three years, so in that sense the economy has a shows over the several years that it may have had more room to run then some people might of estimated and thats been good. Its meant we have had a great deal of job creation over the sears. There could be room left for that to play out further. Policy remains accommodative. We expect further improvement in the labor market and the Unemployment Rate to move down further and to stay down for the next several years, so we do expect that the path of policy we think is appropriate is one that is going to lead to further in the labor market. [inaudible question]. 2 20 emphasize, what if it doesnt move, what if gdp doesnt pick up . What if its a stuck at 1. 7 . Is it your view that there is a risk in the median forecast that as fewer highs hikes than the consensus or more . Look, our policy is not set in stone. We are not locked into any particular policy path. As you said, the data has not notably strengthened. Noise is always in the data from quarter to quarter, but we have to change our view of the outlook and we think we are on the same path. We havent boosted boosted the outlook projective faster growth and we think we are moving along the same course we have been on, but its one that involves gradual tightening in the labor market. I would describe some measures of wage growth have moving some. Some measures havent moved up, but there is some evidence which growth is gradually moving up, which is also suggestive of the strengthening of labor market and we expect policy to remain a con ablative we are talking about a gradual path of removing policy combination as that economy makes progress moving towards mutual, but we continue to provide accommodations to the economy allowing it to grow at an above trend pace consistent with further improvement in the labor market. Hello. Regulatory question, if i may. That administration has reiterated its support for reinstatement of glass to gold in the treasury secretary has called for 21st century. Keeping in mind that theres no specifics on this proposal, is the fundamental idea of separating commercial banking from Investment Banking a fruitful line of inquiry . Is this the lot right path to be pursuing . Soi have not seen any concrete proposalsng this line and i dont really know what eight 21st century glasssteagall would look like. I think my reading on the financial crisis is that it wasnt the major source of the financial crisis. In fact, many of the problems emanated from Investment Banking units. To me, unimportant reform in thereafter a a important reform in the aftermath of the crisis was to make sure Investment Banking activities where it were a core part of the Banking System where leverage had built and those were appropriately capitalized with liquidity and their management was strengthened and thats what we have tried to do, but obviously we would look at any proposals that are put forward. Im not aware of anything concrete. [inaudible question] i dont think it was the cause of the financial crisis and i do feel that we have significantly strengthened supervision of Bank Holding Companies that incorporates Investment Banking activities. [inaudible] hello. Jolene content with nbc news. What message are you trying to send consumers with this rate hike . The greater question. The simple message is that economy is doing well. We have confidence in the robustness of the economy and its resilience to shocks. Is performed well over the last several years. We have created since the financial crisis around 16 million jobs. The Unemployment Rate has moved way down and many more people feel optimistic about their prospects in the labor market. There is job security. We see more people who are feeling free to quit their jobs, getting outside offers, looking for other opportunities, so i think the job market with is a important focus for us is certainly improving. Thats not to say that its good labor Market Conditions for every individual in the United States. We know there are problems that face, particularly people with less skill and education in a certain sectors of the economy, but Many Americans are enjoying a stronger labor markets and feel very much better about that and inflation is moving up, i think, towards our 2 objective and we are operating in an environment where the us economy is performing well and we seem pretty balanced, citing people can people can feel good about the economic out outlook. Hello. Bloomberg news. You emphasized that the inflation target is symmetric. Would you be able to expand a bit on why you did that . White was included and how much of an overshoot would the fed tolerate and for how long . A couple of years ago we included the word symmetric in our statement of longer run goals. This seems like an appropriate time to introduce that word into the statements because we had previously indicated that there was a shortfall of inflation from our 2 objective. Headline is inflation has moved almost back up to 2 and onsite indicated a better forwardlooking measure of inflation, core inflation that is not our target, but i think it is worth looking at because its a better forward looking predictor of headline inflation. I think that is still running a bit under 2 , but we expect it to move up to 2 and this seems like a good time to remind americans that what our objective is is 2 inflation. Inflation is not always going to be a 2 . Like all economic variables it fluctuates turks sometimes its going to be below 2 , sometimes above 2 . We have at a long. In which inflation has run under 2 and as we move back to 2 which is where we are heading there will be times when its above 2 as well and its a reminder, 2 is not a feeling on inflation, but a target. Its where we always want inflation to head and there will be times when inflation is about 2 i could spend below 2 . We are not shooting for inflation about 2 , but its a reminder that there will be deviations above and below when we are achieving our objective. [inaudible] if there was an overshoot and it appeared to be persistent we would put in place policies to try to bring inflation back to 2 . Abets the Core Principles we have adopted in our statement on longer run goals and strategy and exactly how long it would take to get back to 2 would depend in part on what would happen with respect to employment and our other objectives, so there is no hard and fast answer to that. Cnn in. Border adjustment tax would cause the dollar to strengthen. I realize you cant comment on specific policy proposal, but if the dollar were to strengthen quickly, perhaps 20 for whatever reason what do you think the impact would be on the us economy particularly in exports and manufacturing and what would be the implications for us Monetary Policy . Thats a difficult question to answer. You ask that question, not in an isolated way, what with the impact of a large appreciation of the dollar b, but as i understand us about it in the context of a border tax adjustment. Is that correct . Because the argument that is made is that what a border tax would do without Exchange Rate adjustment is to raise the price of imported goods into the us and that large movement in the dollar that analysts claim would occur would essentially if it were complete would fully offset the impact of the border tax on us import goods, so it wouldnt indepth having an impact on us inflation or gdp growth, but a question that is very difference matter than if suddenly for some reason the dollar was simply to begin appreciating by a large amount, say because there were flight to safety flows into the dollar, i mean, if the latter were to occur it was just a big boost in the dollar it would tend to put down with pressure on inflation and would have a negative effect on us export growth intent to boost imports, but thats a different exercise. I would just say its very uncertain exactly what would happen to the dollar. Theres been a lot of discussion of that and i think its complicated and uncertain. Politico. My question is about republicans on the House Financial Services committee that they wrote to you asking the fed not put forward regulations until a vice chair is a provision is in place, so ive a couple questions about that. One, are you all pulling back at all on any regulations, maybe not all regulation, but maybe only Going Forward with ones you see as more time sensitive . During the hearing before that committee you mentioned specifically the stress test rule would have to come out sometime before that next cycle. Are there any other time sensitive regulations . At this point we dont have a lot of time sensitive regulations. There is nothing right now that we need to get out thats a significant rule, so we have a relatively light regulatory agenda at this point. We recognize that we do have an obligation to write the rules that congress dictates and laws that they and so thats an ongoing obligation that we have, but our calendar is relatively light at this point. Nancy marshall again with marketplace. Summa fed critics have said its too soon to raise Interest Rates because of wages have not risen enough to justifies a rate increase. What would you say to that . I would like to see wages increase and think theres some scope for them to increase somewhat further, but our object sieves are maximum employment and inflation and we need to consider what path of rate is appropriate for those objectives , unfortunately one of the things thats been holding down wage increases is very slow productivity growth and i think we are seeing some pressure as the labor market tightens. I think as a signal we are coming closer to our maximum employment objectives, but productivity is for those focusing on wage growth productivity is an additional important factor