FOMC Press Conference June 17, 2015 | Summary and Q&A

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June 17, 2015
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Federal Reserve
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FOMC Press Conference June 17, 2015

TL;DR

The Federal Open Market Committee has decided to keep the current target range for federal funds rate unchanged. Chair Yellen mentioned that job gains have increased and labor market conditions have improved, but inflation is still below the objective. The timing of the initial increase in the federal funds rate will depend on further improvement in the labor market and confidence in inflation reaching the 2% objective.

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Key Insights

  • ☠️ The Federal Open Market Committee has decided to keep the federal funds rate unchanged.
  • ☠️ The timing of the first increase in the federal funds rate will depend on further improvements in the labor market and confidence in inflation reaching the 2% objective.
  • 🍦 The U.S. economy had a soft first quarter, but there have been moderate job gains and household spending remains favorable.

Transcript

CHAIR YELLEN. Good afternoon. Today the Federal Open Market Committee reaffirmed the current 0 to one quarter percent target range for the federal funds rate. Since the Committee last met in April, the pace of job gains has picked up and labor market conditions have improved somewhat further. Inflation has continued to run below our longer-run obje... Read More

Questions & Answers

Q: Why did the Federal Open Market Committee decide to keep the federal funds rate unchanged?

The Committee believes that although there have been improvements in the labor market, inflation is still below the 2% objective, and further improvements are needed before raising rates.

Q: What factors will determine the timing of the first increase in the federal funds rate?

The timing will depend on further improvements in the labor market and confidence that inflation will reach the 2% objective.

Q: How has the U.S. economy performed so far this year?

The U.S. economy had a soft first quarter, with little change in GDP growth. However, household spending appears favorable, and there have been moderate job gains.

Q: How important is the timing of the initial increase in the federal funds rate?

Chair Yellen emphasized that the importance of the initial increase should not be overstated. The stance of monetary policy will likely remain highly accommodative even after the initial increase to support continued progress in employment and inflation.

Summary & Key Takeaways

  • The Federal Open Market Committee has decided to maintain the current target range for federal funds rate.

  • There has been an increase in job gains and improvement in labor market conditions, but inflation remains below the 2% objective.

  • The timing of the first increase in the federal funds rate will depend on further improvements in the labor market and confidence in inflation reaching the 2% objective.

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