MELISSA BLOCK, HOST:
This is ALL THINGS CONSIDERED from NPR News. I'm Melissa Block.
ROBERT SIEGEL, HOST:
And I am Robert Siegel. Federal Reserve chair Janet Yellen may have learned a lesson - don't get specific when talking about when the benchmark interest rate may go up. She made that mistake during her first news conference as Fed chief. Today she left it at it depends, and as NPR's John Ydstie reports, Yellen also gave a relatively upbeat assessment of the economy following a two- day meeting.
JOHN YDSTIE, BYLINE: Fed officials concluded their meeting with no significant change in policy. As expected they continued to wind down their monthly bond buying stimulus program, trimming another $10 billion from their monthly purchases. They cited improvement in the labor market, which Yellen referenced in her news conference.
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JANET YELLEN: Over the last three months for example, employment - payroll employment has been raising around 230,000 jobs per month.
YDSTIE: That's significantly above the monthly average for the past year, but the Fed also acknowledged the drag on growth during the harsh winter. It's newly published forecast cut its expectation for growth this year to about 2 percent, down from nearly 3 percent in its March forecast. But in the statement following their meeting, Fed policymakers said that growth has rebounded in recent months and Yellen said there are many reasons to believe growth next year could end up reaching the 3 percent the Fed forecasts. Among the stimulative Fed policy, less drag from cuts in government spending.
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YELLEN: We have easing credit conditions, an improving job market, we rising home prices and rising equity prices and an improving global economy.
YDSTIE: Yellen did acknowledge the conflict Iraq posed a risk to the growth forecast because it could disrupt the flow of oil. Asked if maybe stock prices, which have risen to record levels might be in bubble territory, Yellen said the Fed monitors things like valuations and dividends to see if they're outside historical norms.
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YELLEN: And I still don't see that. I still don't see that for equity prices broadly.
YDSTIE: Stocks rallied after that reassurance sending the S&P 500 to a new record close. But the big question for investors remains when will the Fed began raising its short-term interest rate? In her first news conference in March Yellen said maybe six months after the end of its bond buying program, likely to conclude this fall. But today she gave no timetable.
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YELLEN: It depends on how the economy progresses, the progress we're making in achieving our objectives and that's the key determinant of when interest rate increases are likely to come.
YDSTIE: Yellen said inflation still remains below the Fed's 2 percent target and unemployment remains well above their objective. That means Fed officials continue to remain comfortable holding their benchmark interest rate near zero. John Ydstie NPR News, Washington. Transcript provided by NPR, Copyright NPR.
