Janet Yellen Testifies About The Fed's Dovish Future - Live Feed

Tyler Durden's picture

Fed Chair Janet Yellen will provide Congress with an update on the state of the economy, how rosy the future is, why she needs to keep rates lower for longer, and that there are no bubbles (oh apart from in bonds which everyone should sell because we need the collateral). These are her first comments since the FOMC press conference in mid-June and stocks have soared since then (as bond yields have tumbled) and she will have to tread a fine line between exuberant over headline job improvements and the need to keep over-inflated bubbles pumped full of cheap/free money for longer...


Here's your recovery Janet...


Live Feed



Altnernate Live Feed



Full Testimony...

Chairman Johnson, Ranking Member Crapo, and members of the Committee, I am pleased to present the Federal Reserve's semiannual Monetary Policy Report to the Congress. In my remarks today, I will discuss the current economic situation and outlook before turning to monetary policy. I will conclude with a few words about financial stability.

Current Economic Situation and Outlook
The economy is continuing to make progress toward the Federal Reserve's objectives of maximum employment and price stability.

In the labor market, gains in total nonfarm payroll employment averaged about 230,000 per month over the first half of this year, a somewhat stronger pace than in 2013 and enough to bring the total increase in jobs during the economic recovery thus far to more than 9 million. The unemployment rate has fallen nearly 1-1/2 percentage points over the past year and stood at 6.1 percent in June, down about 4 percentage points from its peak. Broader measures of labor utilization have also registered notable improvements over the past year.

Real gross domestic product (GDP) is estimated to have declined sharply in the first quarter. The decline appears to have resulted mostly from transitory factors, and a number of recent indicators of production and spending suggest that growth rebounded in the second quarter, but this bears close watching. The housing sector, however, has shown little recent progress. While this sector has recovered notably from its earlier trough, housing activity leveled off in the wake of last year's increase in mortgage rates, and readings this year have, overall, continued to be disappointing.

Although the economy continues to improve, the recovery is not yet complete. Even with the recent declines, the unemployment rate remains above Federal Open Market Committee (FOMC) participants' estimates of its longer-run normal level. Labor force participation appears weaker than one would expect based on the aging of the population and the level of unemployment. These and other indications that significant slack remains in labor markets are corroborated by the continued slow pace of growth in most measures of hourly compensation.

Inflation has moved up in recent months but remains below the FOMC's 2 percent objective for inflation over the longer run. The personal consumption expenditures (PCE) price index increased 1.8 percent over the 12 months through May. Pressures on food and energy prices account for some of the increase in PCE price inflation. Core inflation, which excludes food and energy prices, rose 1.5 percent. Most Committee participants project that both total and core inflation will be between 1-1/2 and 1-3/4 percent for this year as a whole.

Although the decline in GDP in the first quarter led to some downgrading of our growth projections for this year, I and other FOMC participants continue to anticipate that economic activity will expand at a moderate pace over the next several years, supported by accommodative monetary policy, a waning drag from fiscal policy, the lagged effects of higher home prices and equity values, and strengthening foreign growth. The Committee sees the projected pace of economic growth as sufficient to support ongoing improvement in the labor market with further job gains, and the unemployment rate is anticipated to continue to decline toward its longer-run sustainable level. Consistent with the anticipated further recovery in the labor market, and given that longer-term inflation expectations appear to be well anchored, we expect inflation to move back toward our 2 percent objective over coming years.

As always, considerable uncertainty surrounds our projections for economic growth, unemployment, and inflation. FOMC participants currently judge these risks to be nearly balanced but to warrant monitoring in the months ahead.

Monetary Policy
I will now turn to monetary policy. The FOMC is committed to policies that promote maximum employment and price stability, consistent with our dual mandate from the Congress. Given the economic situation that I just described, we judge that a high degree of monetary policy accommodation remains appropriate. Consistent with that assessment, we have maintained the target range for the federal funds rate at 0 to 1/4 percent and have continued to rely on large-scale asset purchases and forward guidance about the future path of the federal funds rate to provide the appropriate level of support for the economy.

In light of the cumulative progress toward maximum employment that has occurred since the inception of the Federal Reserve's asset purchase program in September 2012 and the FOMC's assessment that labor market conditions would continue to improve, the Committee has made measured reductions in the monthly pace of our asset purchases at each of our regular meetings this year. If incoming data continue to support our expectation of ongoing improvement in labor market conditions and inflation moving back toward 2 percent, the Committee likely will make further measured reductions in the pace of asset purchases at upcoming meetings, with purchases concluding after the October meeting. Even after the Committee ends these purchases, the Federal Reserve's sizable holdings of longer-term securities will help maintain accommodative financial conditions, thus supporting further progress in returning employment and inflation to mandate-consistent levels.

The Committee is also fostering accommodative financial conditions through forward guidance that provides greater clarity about our policy outlook and expectations for the future path of the federal funds rate. Since March, our postmeeting statements have included a description of the framework that is guiding our monetary policy decisions. Specifically, our decisions are and will be based on an assessment of the progress--both realized and expected--toward our objectives of maximum employment and 2 percent inflation. Our evaluation will not hinge on one or two factors, but rather will take into account a wide range of information, including measures of labor market conditions, indicators of inflation and long-term inflation expectations, and readings on financial developments.

Based on its assessment of these factors, in June the Committee reiterated its expectation that the current target range for the federal funds rate likely will be appropriate for a considerable period after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal and provided that inflation expectations remain well anchored. In addition, we currently anticipate that even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the federal funds rate below levels that the Committee views as normal in the longer run.

Of course, the outlook for the economy and financial markets is never certain, and now is no exception. Therefore, the Committee's decisions about the path of the federal funds rate remain dependent on our assessment of incoming information and the implications for the economic outlook. If the labor market continues to improve more quickly than anticipated by the Committee, resulting in faster convergence toward our dual objectives, then increases in the federal funds rate target likely would occur sooner and be more rapid than currently envisioned. Conversely, if economic performance is disappointing, then the future path of interest rates likely would be more accommodative than currently anticipated.

The Committee remains confident that it has the tools it needs to raise short-term interest rates when the time is right and to achieve the desired level of short-term interest rates thereafter, even with the Federal Reserve's elevated balance sheet. At our meetings this spring, we have been constructively working through the many issues associated with the eventual normalization of the stance and conduct of monetary policy. These ongoing discussions are a matter of prudent planning and do not imply any imminent change in the stance of monetary policy. The Committee will continue its discussions in upcoming meetings, and we expect to provide additional information later this year.

Financial Stability
The Committee recognizes that low interest rates may provide incentives for some investors to "reach for yield," and those actions could increase vulnerabilities in the financial system to adverse events. While prices of real estate, equities, and corporate bonds have risen appreciably and valuation metrics have increased, they remain generally in line with historical norms. In some sectors, such as lower-rated corporate debt, valuations appear stretched and issuance has been brisk. Accordingly, we are closely monitoring developments in the leveraged loan market and are working to enhance the effectiveness of our supervisory guidance. More broadly, the financial sector has continued to become more resilient, as banks have continued to boost their capital and liquidity positions, and growth in wholesale short-term funding in financial markets has been modest.

In sum, since the February Monetary Policy Report, further important progress has been made in restoring the economy to health and in strengthening the financial system. Yet too many Americans remain unemployed, inflation remains below our longer-run objective, and not all of the necessary financial reform initiatives have been completed. The Federal Reserve remains committed to employing all of its resources and tools to achieve its macroeconomic objectives and to foster a stronger and more resilient financial system.

Thank you. I would be pleased to take your questions.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Keltner Channel Surf's picture

Today’s keyword phrase to listen for in Yellen’s testimony, to be used both by HFT algorithms in ramping and Wharton’s MBA class in their traditional peach schnapps drinking game, is:  “ice cream.”

nope-1004's picture

Mispelled it Tyler.  Should be "Lie Feed".


ZippyBananaPants's picture

Transitory????  Who in the fuck created this word?

The Limerick King's picture



Yellen is starting to speak

Proclaiming that things are still weak

Her mandate is dual

1) To act like a fool

2) And to make inequality peak

pods's picture

(S)he should be hung for simply agreeing with a 2% inflation target.


smlbizman's picture

she probably is hung....

rccalhoun's picture

 the bubble is under-inflated

tarsubil's picture

What a freak show. Johnson's brain implodes in 2006 and he stays because what would a Congressmen need with a brain?

asking4it2k's picture

Wait until the US defaults on the debt and Food stamps and social security is cut off to pay off bond holders. You will see rioting and desperate people doing desperate things.

souljaboy's picture

I'm guessing it smells really bad under her clothes.

LawsofPhysics's picture

Why so "dovish" if everything is "improving"?


Keltner Channel Surf's picture

Well, asking her to take a “more hawkish” stance is like expecting your pet parakeet to attack a Rottweiler.

Keltner Channel Surf's picture

The impossible just happened.  As a matter of principle, I did a successful SHORT Russell trade while Yellen's mug was on the TV screen (!).  While I netted all of $50 (you didn't expect me to bet the house while that female Yoda was dovely yammering, did you?), and RUT is now reversing a bit, could this be a sign of hope for the good guys??   (Sigh).  Nope, not a chance . . .

Lewshine's picture

Today, the Fed justifies more printing - Tomorrow, everyone who profits from the printing, will be selling us "The recovery".


Eyeroller's picture

I'll take a pass on watching the Ponzi Munchkin and her skittle-shatting unicorns.

Atomizer's picture

Chrome dome should have a few comedical statements.

Tjeff1's picture

In todays news:

Yellen - the dwarf, toadie, marble mouthed, member of the rodent class, first "woman" fed chair will dazzle the cheerleaders today. 

buzzsaw99's picture

a pseudo-academic product of the usa edukashunal sistum with maggot puppet strings attached

Whoa Dammit's picture

They call her The Dimon's dawg.

David Bowe live version:


Dr. Venkman's picture

. . . macroprudential . . .noise. . . macroprudential.

yogibear's picture

More printing and back-door treasury buying. In the mean time everything at the food store has gone up in price.

nope-1004's picture

But Bernocchio said that his greatest achievement during his tenure as Fed chair-liar was "transparency".  So Ben, in the name of your "transparency", who is the back-door buyer of Treasuries through Belgium?

Ahhhhhh..... the liar will never tell.  That's banker transparency - just pure lies.  NOTHING they say has a thread of truth.  100% LIES.


ejmoosa's picture

How many pictures do these photographers need?


Nothing's changed.

Cthonic's picture

Say "aahhhhh" while we stick a couple of cameras in your face.

Honey Badger's picture

Is Mr. Johnson drunk?

tarsubil's picture

The official story is that he had a stroke due to a congenital defect. The more likely story is that he had a seisure due to going cold turkey. That would explain why he looks 20 years older than he is.

buzzsaw99's picture





moneybots's picture



Define normal.

buzzsaw99's picture

the fed just bought $4T worth of securities. in that environment it is normal for the muppets to buy a bunch of garbage from the bankers on margin.

1stepcloser's picture

Mr. Crapo needs to to beat his father for that name

Calculus99's picture

If Janet were to call you out of the blue, perhaps she got the wrong number, you wouldn't be wrong thinking Forrest Gump was on the other end.

Al Huxley's picture

So there you have it - the FED is happy with the progress towards converting the majority of Americans to part-time WalMart greeters and burger flippers, and will consider that the new 'full employment' benchmark.

TabakLover's picture

Mmmmmm, she has an intresting job - Professional Obfuscater, LLTT (Licensed to Lie when Things get Tough)

TabakLover's picture

WHOA...........she must have just stepped on her pee-pee.  SPY down 5 in a second.

optimator's picture

Laughable, as both read off a script that was poorly rehearsed but diseminated to the inside folks.  Why even bother.

JustObserving's picture

How many lies can you tell in one hour? Yellen will top that.

Itchy and Scratchy's picture

She even looks and sounds like a dove! I'll bet she even lays eggs!

TabakLover's picture

I bet she would cut off anyone's nuts who got in her way.

ekm1's picture

Federal Reserve Chair is the equal position with Chief of CIA.


Fed is simply an Agitation and Propaganda department and makes no major decisions.


Decisions are made at Senate Banking Committee and the White House.

ekm1's picture

People are stuck with 'raising rates' which means nothing now.


What matters is draining liquidity. Raising rates does NOT do that.

Fed selling bonds, does it.


Interest rates are irrelevant right now.

Fix It Again Timmy's picture

"Malice in Blunderland"......She's actually Dr. Evil in drag [sorry, it's the best he could do with what he has]....

ejmoosa's picture

Were I to go into a bar and buy 1/2 of all the drinks consumed for the patrons inside, and continued to do so, would the atmosphere be "normal"?

Or would the patrons consume beyond their normal amounts, abandoning their normal behaviors?

TrustWho's picture

I wish some Senator had the balls to pull a Paul Ryan.

"Frankly, I and the American people just do not believe you as they think you are robbing from the poor to pay the rich. What should I tell the 99.9% of my citizens who want to terminate The Fed as President Andrew Jackson did?

Kaiser Sousa's picture



orangegeek's picture

the retail numbers suck yellen


July 30 Q2 GDP forecast is set for 3.2%


let's see what this fraudulent twat does to cook the system to show this

Bo Peep's picture

Fucking painful