Janet Yellen Congressional Testimony Notes July 2015

Appropriate to normalize at some point this year

“If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target, thereby beginning to normalize the stance of monetary policy.”

But this is not a statement of intent

“But let me emphasize again that these are projections based on the anticipated path of the economy, not statements of intent to raise rates at any particular time.”

This is a sign of progress

“A decision by the Committee to raise its target range for the federal funds rate will signal how much progress the economy has made in healing from the trauma of the financial crisis. That said, the importance of the initial step to raise the federal funds rate target should not be overemphasized.”

Highly accommodative for quite some time

“What matters for financial conditions and the broader economy is the entire expected path of interest rates, not any particular move, including the initial increase, in the federal funds rate. Indeed, the stance of monetary policy will likely remain highly accommodative for quite some time after the first increase in the federal funds rate in order to support continued progress toward our objectives of maximum employment and 2 percent inflation.”