Financial markets are obsessed with trying to figure out whether the Federal Reserve will raise interest rates. Stock and bond markets rise and fall on rumors and indications of what the Fed will do. The Federal Reserve makes these decisions through a committee called the Federal Open Market Committee (FMOC). The 12 members of the FMOC meet 8 times a year to discuss and debate current economic conditions and the near-term outlook for economic growth, unemployment, and inflation. Based upon these deliberations, the committee may elect to nudge interests rates higher or lower. The meetings of the committee, which are closed to the public, are the subject of intense pre-meeting speculation by Wall Street about potential Federal Reserve actions. To foster greater transparency, the Chair of the FOMC holds a press conference immediately after each meeting to update the market on their deliberations.
The FOMC met on September 21, 2016. Janet Yellen, the Chair of the FMOC and the most senior executive at the Federal Reserve, announced in the press conference that the Federal Reserve would not take action at this time to raise the federal funds rate, the interest rate the FOMC controls most directly. She also communicated that “We continue to expect that the evolution of the economy will warrant only gradual increases in the federal funds rate over time to achieve and maintain our objectives.”
Watch Yellen, a Brooklyn-born native who when to high school in Bay Ridge, deliver this message and take questions from the press.
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