![[FOMC]美연준 금리 동결 이후 FRB 재닛 옐런이 밝히는 미국 기준금리 인상 및 대차대조표 자산 축소 일정 / 기자회견 전문](https://nimage.g-enews.com/phpwas/restmb_allidxmake.php?idx=5&simg=2017072615573603551906806b77b12114162187.jpg)
미국 연준은 27일 새벽 이틀간의 FOMC를 끝내면서 정책 성명서를 발표했다.
다음은 기자회견 전문
Chair Yellen’s Press Conference FINAL
CHAIR YELLEN. Good afternoon. Before I get started, I just want to say that our
thoughts are with those who were injured this morning.
Today the Federal Open Market Committee decided to raise the target range for the
another gradual reduction in the amount of policy accommodation reflects the progress the
economy has made, and is expected to make, toward maximum employment and price stability
objectives assigned to us by law.
We also released today, as an addendum to our Policy Normalization Principles and
Plans, additional information on the process that we will follow in normalizing the size of our
balance sheet once we determine that it is appropriate to begin doing so. I’ll have more to say
about our interest rate decision and our balance sheet policy, but first I’ll review recent economic
developments and the outlook.
Following a slowdown in the first quarter, economic growth appears to have rebounded,
resulting in a moderate pace of growth so far this year. Household spending, which was
particularly soft earlier this year, has been supported by solid fundamentals, including ongoing
improvement in the job market and relatively high levels of consumer sentiment and wealth.
Business investment, which was weak for much of last year, has continued to expand. And
exports have shown greater strength this year, in part reflecting a pickup in global growth.
Overall, we continue to expect that the economy will expand at a moderate pace over the next
few years.
In the labor market, job gains have averaged about 160,000 per month since the start of
the year—a solid rate of growth that, although a little slower than last year, remains well above
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estimates of the pace necessary to absorb new entrants to the labor force. The unemployment
rate has fallen about ½ percentage point since the beginning of the year and was 4.3 percent in
May, a low level by historical standards and modestly below the median of FOMC participants’
estimates of its longer-run normal level. Broader measures of labor market utilization have also
improved this year. Participation in the labor force has been little changed, on net, for about
three years. Given the underlying downward trend in participation stemming largely from the
aging 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 that the job market will strengthen
somewhat further.
Turning to inflation, the 12-month change in the price index for personal consumption
expenditures was 1.7 percent in April, up from less than 1 percent last summer but down
somewhat over the past few months. Core inflation—which excludes the volatile food and
energy categories and tends to be a better indicator of future inflation—has also edged lower.
The recent lower readings on inflation have been driven significantly by what appear to be oneoff
reductions in certain categories of prices, such as wireless telephone services and prescription
drugs. These price declines will, as a matter of arithmetic, restrain the 12-month inflation figures
until the extraordinarily low March reading drops out of the calculation. However, with
employment near its maximum sustainable level and the labor market continuing to strengthen,
the Committee still expects inflation to move up and stabilize around 2 percent over the next
couple of years, in line with our longer-run objective. Nonetheless, in light of the softer recent
inflation readings, the Committee is monitoring inflation developments closely.
Let me now turn to the economic projections that Committee participants submitted for
this meeting. As always, participants conditioned their projections on their own individual views
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of appropriate monetary policy, which, in turn, depend on each participant’s assessment of the
many factors that shape the outlook. The median projection for growth of inflation-adjusted
gross domestic product, or real GDP, is 2.2 percent this year and edges down to 1.9 percent by
2019, slightly above its estimated longer-run rate. The median projection for the unemployment
rate stands at 4.3 percent in the fourth quarter of this year and ticks down to 4.2 percent in 2018
and 2019, modestly below the median estimate of its longer-run normal rate. Finally, the median
inflation projection is 1.6 percent this year and rises to 2 percent in 2018 and 2019. Compared
with the projections made in March, real GDP growth is little changed, the unemployment rate
follows a moderately lower path, and inflation—although marked down this year for reasons I
mentioned earlier—is unchanged over the following two years. In addition, the median estimate
of the longer-run normal unemployment rate moved down a tenth to 4.6 percent.
Returning to monetary policy, for the past year and a half the FOMC has been gradually
increasing its target range for the federal funds rate as the economy has continued to make
progress toward our goals of maximum employment and price stability. Our decision today
continues this process.
We continue to expect that the ongoing strength of the economy will warrant gradual
increases in the federal funds rate to sustain a healthy labor market and stabilize inflation around
our 2 percent longer-run objective. That’s based on our view that the federal funds rate remains
somewhat below its neutral level—that is, the level of the federal funds rate that is neither
expansionary nor contractionary and keeps the economy operating on an even keel. Because the
neutral rate is currently quite low by historical standards, the federal funds rate would not have to
rise all that much further to get to a neutral policy stance. But because we also expect the neutral
level of the federal funds rate to rise somewhat over time, additional gradual rate hikes are likely
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to be appropriate over the next few years to sustain the economic expansion. Even so, the
Committee continues to anticipate that the longer-run neutral level of the federal funds rate is
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 percent at the end of this year, 2.1 percent
at the end of next year, and 2.9 percent at the end of 2019, about in line with its estimated longerrun
value. Compared with the projections made in March, the median 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 their
economic outlooks and views of the risks to their outlooks. As I’ve noted previously, policy is
not on a preset course.
Let me now turn to our balance sheet. As I noted in our policy statement, we are
continuing to maintain the size of our balance sheet by reinvesting proceeds from maturing
Treasury securities and principal payments from agency debt and mortgage-backed securities.
Provided that the economy evolves broadly as the Committee anticipates, we currently expect to
begin implementing a balance sheet normalization program this year. Consistent with the
principles and plans we released in 2014, this program would gradually decrease our
reinvestments and initiate a gradual and largely predictable decline in our securities holdings.
The addendum to our Policy Normalization Principles and Plans that we released today
provides further information. For both Treasury and agency securities, we will reinvest proceeds
from our holdings only to the extent that they exceed gradually rising caps on the reductions in
our securities holdings. Initially, these caps will be set at relatively low levels—$6 billion per
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month for Treasuries and $4 billion per month for agencies. So, any proceeds exceeding those
amounts would be reinvested. These caps will gradually rise over the course of a year to
maximums of $30 billion per month for Treasuries and $20 billion per month for agency
securities and will remain in place through the normalization process. By limiting the volume of
securities that private investors will have to absorb as we reduce our holdings, the caps should
guard against outsized moves in interest rates and other potential market strains.
As I previously noted, when our securities holdings begin to gradually decline, so too will
the supply of reserve balances in the banking system. At some point, probably a few years down
the road, the Committee will bring the decline in our balance sheet to an end as the quantity of
reserves is normalized. I can’t tell you what the longer-run normal level of reserve balances will
be because that will depend on the Committee’s eventual decisions about how to implement
monetary policy most efficiently and effectively in the longer run, as well as a number of as-yet
unknown elements, including the banking system’s future demand for reserves and various
factors that may affect the daily supply of reserves. What I can tell you is that we anticipate
reducing reserve balances and our overall balance sheet to levels appreciably below those seen in
recent years but larger than before the financial crisis.
As readers of our minutes know, the Committee has on previous occasions discussed
potential long-run frameworks for implementing monetary policy. Decisions about the
appropriate long-run framework do not need to be made for quite some time, and our future
deliberations will benefit from the experience we will gain during the normalization process. At
this point, I’ll just point out that our current system is working well and has some important
advantages. In particular, it is simple and efficient to operate, does not require active
management of the supply of reserves, and, most importantly, provides good control over the
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federal funds rate and effective transmission of changes in the federal funds rate to broader
money market rates. And because our current system is likely compatible with a much smaller
quantity of reserves, our plan for gradually reducing our balance sheet does not constrain the
Committee’s future options for how to implement monetary policy.
Finally, as noted in today’s addendum, the Committee affirmed that changing the target
range for the federal funds rate is our primary means of adjusting the stance of monetary policy.
In other words, the balance sheet is not intended to be an active tool for monetary policy in
normal times. However, the Committee would be prepared to resume reinvestments if a material
deterioration in the economic outlook were to warrant a sizable reduction in the federal funds
rate. More generally, the Committee would be prepared to use its full range of tools, including
altering the size and composition of its balance sheet, if future economic conditions were to
warrant a more accommodative monetary policy than can be achieved solely by reducing the
federal funds rate.
Thank you. I’ll now be happy to take your questions.
NICK TIMIRAOS. Nick Timiraos of the Wall Street Journal. Chair Yellen, the
principles you released today say the balance sheet wind-down should commence once interest
rate normalization is “well under way.” With this latest rate increase, do you believe
normalization is now well under way?
CHAIR YELLEN. So that is something that we’ve said for some time, and I’ve
previously—when I’ve been asked what “well under way” means—said that I don’t want to
define that in purely quantitative terms but rather in qualitative terms. So there’s no specific
level of the federal funds rate that means we’re well under way. But it’s also a question of not
only the current level, but our confidence in the outlook and our projections for the future path of
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the federal funds rate. So we have increased our federal funds rate target now several times. Our
outlook is that we anticipate further increases this year and next year for the federal funds rate,
and our statement indicates that if the economy continues to evolve in the manner that we expect,
that we would feel the conditions are in—will be in place to begin this process this year.
STEVE LIESMAN. Steve Liesman, CNBC. Madam Chair, I’m wondering if you’ve
talked to the President or members of his staff about the possibility of staying on as Chair for a
second term. I’m also wondering if you would consider doing that—that’s something you
thought about doing. And, finally, there are three vacancies on the Fed. Have you—do you have
any comment at all for the President about his failure to nominate anybody for those three
positions? Thank you.
CHAIR YELLEN. So what I’ve said about my own situation is that I fully intend to serve
out my term as Chair, which ends in early February. I have not had conversations with the
President about future plans. And I do very much hope—I know that they have been working
hard to identify appropriate nominees for the open slots, and I do very much hope that there will
be nominations in the not-too-distant future, and that the Senate will take those up expeditiously.
I look forward to having a full Board.
STEVE LIESMAN. And, I’m sorry, just to follow up: Do you desire to stay on?
CHAIR YELLEN. I really don’t have anything for you at this point.
SAM FLEMING. Thanks very much. Sam Fleming from the Financial Times. We’ve
now had a very long streak of—or fairly long streak of weak inflation numbers, at least measured
by the CPI this morning as well. Marketplace-based inflation expectations are declining. What
kind of vigilance are you now saying is needed in terms of weak inflation? How does that
interact with your policy outlook? And would further disappointments argue for pressing
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“pause” on rate hikes or delaying balance sheet runoff? How do you think about those two
potential responses to weak inflation?
CHAIR YELLEN. So let me just say, as I emphasized in my statement and always say,
monetory policy is not on a preset course. We indicated in our statement today that we’re
closely monitoring inflation developments and certainly have taken note of the fact that there
have been several weak readings, particularly on core inflation. Our statement indicates that we
expect inflation to remain low in the near term. But, on the other hand, we continue to feel that
with a strong labor market and a labor market that’s continuing to strengthen, the conditions are
in place for inflation to move up. Now, obviously we need to monitor that very carefully and
ensure, especially with roughly five years of inflation running under our 2 percent objective—
that is a goal to which the committee is strongly committed. And we need to make sure that we
have in place the policies that are necessary to achieve 2 percent inflation, and I pledge that we
will do that.
But let me say, with respect to recent readings, it’s important not to overreact to a few
readings, and data on inflation can be noisy. As I pointed out, there have been some
idiosyncratic factors I think that have held down inflation in recent months, particularly a huge
decline in cell telephone service plan prices, some declines in prescription drugs. We had an
exceptionally low reading on core PCE in March, and that will continue to hold down 12-month
changes until that reading drops out. But we are—this morning’s reading on the CPI showed
weakness in a number of categories, and it’s certainly something that we will be closely
monitoring in the months ahead. We will—we’re focused on making our policy decisions on the
medium-term outlook, and we will, you know, be looking carefully at incoming data and, as
always, revising our outlook and policy plans as appropriate.
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SAM FLEMING. Any implications for beginning of runoff and further increases in the
fed funds rate?
CHAIR YELLEN. So—continue, as today’s actions show, to feel that the economy is
doing well, is showing resilience. We have a very strong labor market, an unemployment rate
that’s declined to levels we have not seen since 2001. And, even with some moderation in the
pace of job growth, we have a labor market that continues to strengthen and policy remains—
remains accommodative. So, I—it’s important that inflation move up to our 2 percent objective,
as our projections show we continue to expect that and believe the conditions are in place. But
we will monitor incoming data, obviously, and be attentive to rethinking our outlook if it seems
appropriate.
CRAIG TORRES. Craig Torres from Bloomberg News. Hate to belabor the point on
inflation, but I was wondering, I hear a lot of the so-called NAIRU in your conversation now and
in other committee members’. It’s an unobservable thing. At best, it’s an estimate. And the
assumptions in there seem to me that the economy today is much like the economy yesterday,
when, if anything, we’ve learned that the post-recession economy is vastly different than it was
before the recession. So I’m wondering, something you’ve talked about is to focus more on the
change in inflation—actual inflation, and is it going up or is it going down, and basing policy
more on that. What would be the risk of that, and why not adopt that if you have such a long
period of underperformance?
CHAIR YELLEN. Well, we are closely looking at the actual performance of inflation
and altering our views on the basis of discrepancies between what we see and our expectations.
And, well, it is very difficult to pin down what is the longer-run normal rate of unemployment,
and there’s a great deal of uncertainty about it, and it’s hard to pin down, especially given the
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fact that the so-called Phillips curve appears to be quite flat. That means that inflation doesn’t
respond very much or very quickly to movements in unemployment. Nevertheless, that
relationship, I believe, remains at work. We have seen that operate historically. Now, in the face
of very low unemployment that we have seen, while wage growth has picked up somewhat, it
remains low, and inflation is influenced by a number of different factors, but we certainly
haven’t seen much or any evident upward pressure on inflation. In light of that, the Committee
has successively moved down its estimate of the normal longer-run rate of unemployment, and in
this projection, it’s moved down to 4.6 percent, a tenth lower than it was last time. So, while the
unemployment rate is below that, it’s not that much—it’s not that much below it.
ANA SWANSON. Ana Swanson, the Washington Post. We saw measures of consumer
and business confidence rise after inauguration on expectations that the Administration would
move quickly to introduce policy changes like tax cuts and infrastructure spending. But some of
those policy changes have been slower to materialize than initially expected. How do you view
the positive and negative risks from policy changes to your outlook, and has your view changed
on that at all in the last six months?
CHAIR YELLEN. So I would say that business and household sentiment remains quite
strong, although many forecasters have pushed back somewhat the timing of the expected policy
changes, such as changes to tax policy or fiscal policy more generally. I would say that, based
on my observation of actual spending behavior and my discussions with our wide range of
contacts, that I haven’t seen very much evidence that, thus far, expectations of policy changes
have driven substantial changes in either consumer spending or investment spending. So I really
wouldn’t expect any significant pullback. Many of our business contacts—I think their
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confidence remains high. They’ve not really changed their plans yet, and they have a wait-andsee
attitude.
BINYAMIN APPELBAUM. Binya Appelbaum, the New York Times. Measures of
financial conditions show that since the Fed started raising interest rates two years ago, financial
conditions actually have loosened. Consumer business borrowing costs in many cases are down.
Do you have the sense that the market is not listening to you? How much of a concern is that for
you? And, at some point, does it convince you that you need to raise rates perhaps more
quickly?
CHAIR YELLEN. Well, in deciding what the appropriate path of rates is, we take many
different factors into account. We have certainly noticed the stock market is up considerably
over the last year. That usually shows up in financial conditions indexes and is an important
reason why some of them show easier financial conditions. There’s been a modest decrease
recently in the value of the dollar, although it’s up substantially since mid-2014. So we take
those factors into account in deriving our forecasts and deciding the appropriate stance of policy.
We have done that, and—but other things also affect the stance of policy. So there really can’t
be any simple relationship. We’re not targeting financial conditions. We’re trying to set a path
of the federal funds rate, but taking account of those factors and others that don’t show up in a
financial conditions index. We’re trying to generate paths for employment and inflation that
meet our mandated objectives.
HOWARD SCHNEIDER. Howard Schneider with Reuters. So, on inflation again, I just
wonder, what’s the possibility that something more, sort of—I mean, nefarious is at work here,
right, which is that the, sort of, weight of central bank credibility now—for a generation, really—
plus globalization has just pushed the world into a low-inflation environment that’s going to be
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very hard to get wages and prices moving again. And then, related to that, you know, if NAIRU
is 4.2, why not 4 or why not 3.8? You banked a quarter—you know, a full percentage point now,
so you’re probably at less risk of falling behind whatever curve exists. Why rush?
CHAIR YELLEN. So I don’t think central bank credibility—at least the Fed’s
credibility—has been impaired. We look at a whole variety of indicators of inflation
expectations. Professional forecasters—whether it’s in the Blue Chip or the Survey of
Professional Forecasters, those expectations have remained quite steady and in close alignment
with our 2 percent inflation target. TIPS-based measures of inflation compensation do not
provide straight reads on market participants’ estimates and expectations about inflation. They
embody other elements—risk premia and liquidity premia as well. They had moved down and
now have moved—they remain at low levels, but they have moved back up again. It is true that
some household surveys of inflation expectations have moved down, but overall I wouldn’t say
that we’ve seen a broad undermining of inflation expectations.
But you asked also, I guess, about have structural changes perhaps impacted the inflation
process, and that certainly is possible. And estimates of the normal longer-run unemployment
rate—they are quite uncertain. I agree with your assessment there. We’re really not certain what
they are. And policy is not being—is not based on some firmly held preconceived notion.
We’re watching very carefully how the actual economy performs. And, you know, I continue to
believe, though, that with job growth running well in excess, even with the moderation of the
level that’s needed to provide for new entrants in the labor market, we do have a strengthening
economy. With policy accommodative, all that we’re doing in raising rates is moving—
removing a bit of accommodation heading toward a neutral pace. And I see that as appropriate.
We’re not moving so aggressively as to put a brake on continued improvement in the labor
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market. But I think that that’s a prudent move, to move in a gradual way to remove
accommodation, with unemployment now—and not only, I should say, the unemployment rate,
but I think any indicator of labor market performance and tightness that you could look at,
whether it’s household perceptions of the availability of jobs, difficulty that firms report in hiring
workers, the rate at which workers are quitting their jobs, the rate of job openings, all of these
indicators do signal a tight labor market.
Now, with inflation below 2 percent, I think it’s appropriate that the labor market be that
tight. But, on the other hand, I think we want to avoid the risk. We want to keep the expansion
on a sustainable path and avoid the risk that at some point we need—we find ourselves in a
situation where we’ve done nothing and then need to raise the funds rate so rapidly that we risk a
recession. So moving to some extent in a timely way to remove accommodation with a strong
economy and continued labor market strength, the Committee believes, is an appropriate
management of risks. But we are attentive to the fact that inflation is running below our
2 percent objective, that we’ve faced that situation now for a long time, and it’s really quite
essential that we put in place policies that will succeed in moving inflation back to our 2 percent
objective, and it’s a symmetric objective. So that’s a risk that we face as well. The Committee
believes we have conditions in place for inflation to move up, but that’s also a risk. And those
things point, I think, to a gradual pace of reducing accommodation.
NANCY MARSHALL-GENZER. Hi, Nancy Marshall-Genzer from Marketplace.
Recently, a group of economists sent the Fed a letter earlier this month disagreeing with your
2 percent inflation target and saying they would like the economy to run a bit hotter. They don’t
think the labor market is so tight. You say you’re committed to the 2 percent target, but what do
you say to them?
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CHAIR YELLEN. So, at the time that we adopted the 2 percent target—it was back in
2012—we had a very thorough discussion of the factors that should determine what our inflation
objective should be. And, you know, I believe that was a well-thought-out decision. Now, at the
moment, we are highly focused on trying to achieve our 2 percent objective. And we recognize
the fact that inflation has been running below, and it’s essential for us to move inflation back to
that objective.
Now, we’ve learned a lot in the meantime, and assessments of the level of the neutral
likely level, currently and going forward, of the neutral federal funds rate have changed and are
quite a bit lower than they stood in 2012 or earlier years. And that means that the economy is—
has the potential where policy could be constrained by the zero lower bound more frequently
than at the time that we adopted our 2 percent objective. So it’s that recognition that causes
people to think we might be better off with a higher inflation objective, and that’s an important
set—this is one of our most critical decisions and one we are attentive to evidence and outside
thinking. It’s one that we will be reconsidering at some future time. And it’s important for our
decisions to be informed by a wide range of views and research which is ongoing inside and
outside the Fed. But a reconsideration of that objective needs to take account not only of
benefits of a higher in—potential benefits of a higher inflation target, but also the potential costs
that could be associated with it. It needs to be a balanced assessment. But I would say that this
is one of the most important questions facing monetary policy around the world in the future, and
we very much look forward to seeing research by economists that will help inform our future
decisions on this.
DON LEE. Thank you. Don Lee with the L.A. Times. The Fed’s projections continue to
show the longer-run federal funds rate at 3 percent. The markets are expecting 2 percent. How
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big of a concern is that gap in your mind? What are the reasons for the disconnect? And, you
know, what are the implications and the risks for the real economy?
CHAIR YELLEN. So let me first say, it’s not straightforward to determine exactly what
expectations are embodied in market prices because there are term premia that affect these rates,
and they may not really be as low as one would infer from a straight read. That said, in part,
expectations reflect estimates of what the neutral federal funds rate is and how it’s likely to
evolve over time. And views have changed about that over time, and there is a good deal of
uncertainty about it. So we have recently put out charts that try to show what the range of
uncertainty is around our path for the federal funds rate, especially as one goes further out.
There’s a good deal of uncertainty and—that reflects the, like—all the shocks that can affect the
evolution of the economy, and also the fact, we’re quite uncertain ourselves about what the
likely—what the evolution will be of the neutral federal funds rate.
So we do try to write that down and provide the public with information about our current
expectations. And the median now stands at around 3 percent, but we have uncertainty about
that. Many of my colleagues and I think that the current neutral level is lower than that. And as
I said in my opening statement, the fed funds rate path reflects an expectation that that neutral
rate will be moving up some in future years. But that remains uncertain, and I think that’s
something that market participants are trying to assess, and we will be as well.
DON LEE. But do you see greater volatility in the markets as it adjusts to the difference
in the gap between the expectation and what the Fed’s projections are for the longer-run federal
funds rate?
CHAIR YELLEN. Well, our expectations are little changed. I mean, the projections we
released today are essentially identical to those. And I think the market is aware of the views of
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participants and is assessing evidence itself to form their own views. And it’s important that the
market take an independent look, and that we get to understand and see how market participants
are interpreting evidence on the evolution of the economy. So it’s not an unhealthy thing to have
such a gap. And, as I just said, our own views are not set in stone but are likely to evolve as well
over time.
MARTIN CRUTSINGER. Marty Crutsinger, Associated Press. Back in 2013, when
you—the Fed first raised the possibility of trimming its bond purchases, it created a bit of
turbulence in financial markets. The taper tantrum caused you to reassess your communication
of that process. This trimming of the bond holdings, though—the financial markets seem to be
taking that in a better way. If down the road, though, you see that there is more of an adverse
reaction, are you planning to make any changes, perhaps change the caps to $30 billion, in the
$20 billion caps? How do you assess how you’ll handle that going forward?
CHAIR YELLEN. So we have indicated for quite some time, I guess, since our—at least
since our 2014 normalization principles, that we wanted to reduce our balance sheet in a gradual
and predictable way. And we have tried systematically to communicate more about how we
would do that as our plans have evolved. And today’s announcement is another step in
providing further details about how we plan to proceed so that when this plan does go into effect,
no one is taken by surprise and market participants understand how this will work.
I think that we—the plan is one that is consciously intended to avoid creating market
strains and to allow the market to adjust to a very gradual and predictable plan. My hope and
expectation is that when we decide to go forward with this plan, that there will be very little
reaction to it, that it’s clear how we intend to proceed, and that this is something that will just run
quietly in the background over a number of years, leading to a reduction in the size of our
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balance sheet and in the outstanding stock of reserves, and that it’s something that the Committee
will not be reconsidering from time to time. We think this is a workable plan, and it will, as one
of my colleagues, President Harker, described it, it will be like watching paint dry, that this will
just be something that runs quietly in the background. So that’s my expectation and our
intention. Look, of course, if it turns out that there is a surprise and a substantial reaction, that is
something we would have to take into account in deciding on the appropriate stance of policy.
MICHAEL MCKEE. Michael McKee from Bloomberg Television and Radio. A couple
of comments from Administration officials I wanted to get your reaction to. The Treasury
Secretary and others have suggested that Dodd-Frank regulation and the way it’s been implied—
applied have restricted credit growth in the economy, banks are not making loans that they
otherwise would, and that has slowed growth. Do you agree with that? And if you get a new
Vice Chair of Supervision who wanted to ease up on regulation, would you go along with that?
Also, I wanted to ask you—it’s been reported the President has congratulated you on being a
“low interest” person. Would you agree with that characterization of your philosophy?
CHAIR YELLEN. Well, with respect to the impact of credit conditions and bank
regulation on slow growth, I’ve previously, in testifying, indicated that I don’t think that our
regulations have played an important role, at least broadly speaking, in impeding credit growth
and the growth of the economy. And I’ve pointed in the past to a number of statistics suggesting
that credit growth continues to be healthy, including among small—smaller community banks
that are most concerned with regulatory burden. I think when banks are undercapitalized and
weak, that impedes credit growth. And when banks are strong, they’re in a much better position
to lend. So that’s been a view that I’ve stated previously.
June 14, 2017 Chair Yellen’s Press Conference FINAL
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Now, in terms of regulation, the Treasury recently issued, on Monday, a detailed report.
And that’s quite a complicated document with lots of recommendations in it. I haven’t had a
chance to review it thoroughly, so I don’t want to comment on too many details. But I would say
it underscores the importance of capital, liquidity, stress testing, and resolution planning in
having a safe and sound banking system, which are views that I and my colleagues have long
espoused. Regulatory burden, when it’s possible to ease it, and a good deal of the Treasury
report is focused on regulatory burden, that’s something that all regulators should be looking to
do. We strongly believe in the importance of tailoring our regulation to the size and complexity
of institutions, of finding ways to relieve burden for community banks. We have been focused
and had a number of initiatives already in that direction, looking for ways, for example, to
simplify capital requirements for community banks. And we’ll continue in that direction and, in
that sense, in those areas certainly share the views expressed in the Treasury report. So there are
a number of areas and suggestions where our thinking aligns well. There is probably some areas
where we’re likely to have differences but quite—you know, quite a number of areas where
we’re, you know, likely to be able to and already are taking actions that are consistent with those
recommendations.
MICHAEL MCKEE. And the characterization of you as a low interest rate person?
CHAIR YELLEN. Well, I have felt that it’s been appropriate for interest rates to remain
low for a very long time. We are in the process of, as the economy strengthens, normalizing
interest rates. But, certainly, we’ve had a lot of years in which interest rates have been low. I
thought it was necessary to support the economy at that time and was strongly in favor of those
policies.
June 14, 2017 Chair Yellen’s Press Conference FINAL
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KAREN MRACEK. Thank you, Karen Mracek with Market News International. Today
you guys outlined the details of the plan to—when you begin to end reinvestments. But you
stopped short of saying exactly when it would be implemented, only saying “this year,” and
adding that that depended on how the economy evolved. Can you tell us why you decided not to
go ahead with it today? Is there certain conditions that you’re looking for? And then, as a
second question, do you think that the—you could raise rates and begin implementation of the
plan at the same time? Thank you.
CHAIR YELLEN. So we have tried as meticulously as we can to provide advanced
warning to markets about how we would go about doing this so that market participants can
prepare. And today’s announcement is another step in that process. So we certainly wanted to
get this information out before we actually undertake the beginning of this plan. And, you know,
as the statement says, we’ve made no definite decision on the timing of the plan, but—the timing
of initiating the plan. But if the economy evolves in line with our expectations, which, you
know, we will be watching—always are—we could put this into effect relatively soon. You
asked about whether or not we would do that and raise rates at the same meeting, and I would
say, we’ve made no decision about that, and it really hinges on the outlook and our assessment of
conditions.
VICTORIA GUIDA. Hi, Victoria Guida with Politico. You mentioned the Treasury
report, and I just wanted to ask, how much weight do you give those recommendations in
considering, you know, potential regulatory changes moving forward? And also, more
specifically, one of the recommendations relates to the Volcker rule. I know you’ve said in the
past that, you know, it might be a good idea to reduce the burden on community banks, but it
also talks about potentially exempting banks with trading assets and liabilities above a certain
June 14, 2017 Chair Yellen’s Press Conference FINAL
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level. And I was wondering if you think that that’s an idea that’s worth exploring, that might be
a good idea.
CHAIR YELLEN. So we have previously suggested exempting community banks,
smaller banks, entirely from the rule. And a number of my colleagues have spoken about the
Volcker rule. Implementation of it is frankly complex, and I’m certainly open to looking at ways
to reduce regulatory burden in that area. The report endorses a restriction on proprietary trading.
So, in that sense, it endorses the main objective of the Volcker rule, which I was pleased to see.
But on implementation, it’s true that the rules were—in part reflecting the way the legislation is
written—were, I think, necessarily complex, but we do have some ideas for how we might
simplify the rule, and certainly it’s something we’re quite open to looking at.
VICTORIA GUIDA. And how much weight do you give Treasury recommendations?
CHAIR YELLEN. Well, I mean, Treasury has a—set out a list of objectives for
regulation that I’m sympathetic to and endorse. I think looking for ways to reduce regulatory
burden, when it can be done without sacrificing safety and soundness or creating systemic risk,
that’s something that all regulators should want to do. We’ve done an awful lot of rule writing
over the last five or six years. And coming back and looking at where we have created burdens
and ways in which we can simplify to reduce, that is an objective that is core to the Treasury
review and that we are very sympathetic with. So, while we may not agree on every detail,
certainly the suggestions that are made there are ones that we will pay attention to and in many
cases are already on our own list of things we should review.
MICHAEL DERBY. Mike Derby from Dow Jones Newswires. In light of the plans to
trim the balance sheet hopefully later this year, what have you learned about QE and your bondbuying
policies as a tool for monetary policy? When they were launched, it wasn’t something
June 14, 2017 Chair Yellen’s Press Conference FINAL
Page 21 of 23
you had, you know, engaged in on that scale before—a lot of fears that it was going to create
hyperinflation. That hasn’t ever seemed to come to pass. So, in light of QE as potentially a tool
for the future—you know, it might come back again—what have you learned about how it works
in the economy? Like, where do you see it affect things? You know, what are sort of the lessons
learned of the experience?
CHAIR YELLEN. Well, thanks. That’s a great question. I mean, staff in the Federal
Reserve and outside economists have done a great deal of work trying to evaluate QE. I think
the general conclusion is that it has worked in that it has put some downward pressure on longerterm
interest rates, so-called term premiums embedded in longer-term interest rates. There’s
disagreement among economists about exactly how large those effects are, and it’s something
that’s difficult to pin down. But, obviously, it has not caused runaway inflation, quite the
contrary. I mean, that was never my expectation, but I do remember when people were afraid
that that would happen.
We do have the tools. We have, you know, even with a large balance sheet—we intend
to shrink our balance sheet now, but even with a large balance sheet, we retain the ability to
move the fed funds rate and set it as appropriate for the needs of the economy. So I think we
have learned that it works. It’s a valuable part of the toolkit. It’s something that, if we were to
encounter an episode in the future of extreme weakness where—I’ve said we want the fed funds
rate and movements in short-term interest rates, that’s our go-to number one main policy tool—
but if we were to hit the zero lower bound and constrained in our use of that tool, certainly
balance sheet policies and forward guidance of the type that we provided, I believe, based on the
evidence of how they worked, ought to remain part of our toolkit. And we have said in the
June 14, 2017 Chair Yellen’s Press Conference FINAL
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bullets that we released today on our balance sheet that in such of—an episode of such extreme
weakness in the future, those are things we would consider going forward.
MICHAEL DERBY. One small follow-up. Is $4½ trillion sort of a natural limit to how
high you might want to push the balance sheet, or could you envision it going higher if you
needed it to?
CHAIR YELLEN. Well, we’ve had no discussion of that issue, you know. And our
focus now is on getting it back to a more normal size. But I would say, the use of QE in the
United States relative to the size of our economy is not as high as it’s been in some other
countries that have employed it. But that’s something we haven’t seriously even discussed.
PATRICK GILLESPIE. Chair Yellen, Patrick Gillespie with CNN. It’s workforce
development week at the White House, and you highlighted several job training—successful job
training programs in your speech in March. The President’s budget has a 40 percent cut to job
training programs. What is your response to the budget cut to job training programs even though
they expect to expand apprenticeship programs? And do you believe that job training programs
and apprenticeships are needed to help fix the job skills gap in the economy?
CHAIR YELLEN. Well, I’m not going to comment on the President’s budget, and these
programs can be undertaken at many different levels. I’ve seen many nonprofits and states and
local authorities put in place programs that looked to me to be successful. I do think we have a
tight labor market and one where employers have jobs where they’re finding difficulty
identifying workers with the appropriate skills. In my own discussions with businesses, what I
hear more of—and this is something I think is a great aspect of a tight labor market—larger firms
are spending more on training and trying to, given that they can’t hire workers with the ideal
skills, are training people to fill jobs that they have available. What I hear from CEOs of smaller
June 14, 2017 Chair Yellen’s Press Conference FINAL
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firms is that they don’t have the ability to launch such programs. They would really very much
like to participate along, for example, with community colleges or nonprofits to see such
programs launched and have jobs that people could fill if they received the appropriate training.
So I do think that this is an important area, and, especially given the pressures that have, you
know, existed for a long time—downward pressure on wages and job opportunities, especially
for those with less skills—I think that this is something that deserves priority.
김대호 기자 yoonsk828@g-enews.com
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