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You can find the current article at its original source at https://www.theguardian.com/business/live/2017/sep/20/us-federal-reserve-decision-janet-yellen-markets-uk-retail-business-live
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US Federal Reserve begins unwinding stimulus and leaves interest rates on hold - live! | US Federal Reserve begins unwinding stimulus and leaves interest rates on hold - live! |
(35 minutes later) | |
8.34pm BST | |
20:34 | |
Yellen expresses concern about the massive cyber attack at credit monitoring agency Equifax. | |
She calls it a “serious breach” and urges Americans to carefully monitor their credit reports. | |
WHOA: Fed Chief #janetyellen scolds #Equifax credit company for its data breach. Warns all customers to remain VIGILANT in monitoring credit | |
8.30pm BST | |
20:30 | |
Q: What would it take for the Fed to start QE again? | |
Yellen gives a long answer, repeating that the Fed could potentially expand its balance sheet in future if there was a “material shock” to the economy, meaning interest rate cuts weren’t a strong enough responce. | |
Perhaps significantly, she talks about how “future policymakers” will have to decide this issue. A hint that she doesn’t expect to be renominated for a second term? | |
Yellen: "It will be up to future policy makers......"Sounds like a farewell statement... | |
8.29pm BST | |
20:29 | |
Here’s a video clip of Janet Yellen’s (deservedly) stinging criticism of Wells Fargo: | |
Yellen: "I consider the behavior of Wells Fargo towards its customers to have been egregious and unacceptable." https://t.co/mmSQqCqih6 pic.twitter.com/urC34Dary4 | |
8.22pm BST | |
20:22 | |
Q: Will you take action against Wells Fargo over its huge misselling scandal? | |
Yellen roasts Wells Fargo, saying its actions are “Egregious and unacceptable”. | |
The Fed is working very hard to understand the root causes of Well Fargo’s problems, and decide the appropriate action. | |
[Background: a year ago, we learned that Wells Fargo staff had created 1.5m deposit accounts and 565,000 credit card accounts without customers’ consent, to meet their sales targets] | |
8.18pm BST | |
20:18 | |
Q: Will there be operational problems when vice-chair Stanley Fischer steps down (early) next month? It will deprive the Federal Reserve of its quorum of four governors. | |
Yellen pays tribute to Fischer’s contribution to the Fed, saying she appreciated his “wise council and friendship”. | |
She says the Fed can carry out its duties with only three governors, but hopes that Congress will approve some new appointees to the Fed board. | |
Yellen says she hopes that Randy Quarles, Trump's nominee for vice chair of supervision, will be confirmed by the Senate. | |
8.15pm BST | |
20:15 | |
Asked about financial regulation, Yellen says it’s important that reforms put in place since the crisis stay put. | |
She adds that regulations could be ‘tailored’ to avoid undue burden on the sector. | |
Yellen: We want to -- and Congress should -- tailor regulations to the risk posed by different kinds of banks. | |
8.12pm BST | |
20:12 | |
Yellen: I've not met with Trump recently | |
Ah, the elephant in the room..... | |
Q: Your current term expires in February 2018 - Have you discussed the situation with Donald Trump, or had any thoughts about your plans? | |
Janet Yellen says she intends to serve her current tern, and will not comment on whether she wants to stays on beyond that. | |
She has not had a further meeting with Trump, since one early meeting shortly after he became president. | |
Breaking: Fed chair Janet Yellen says she has NOT met with President Trump to discuss the next Fed chair. She won't say if she wants to stay | |
As clock ticks on #Yellen's term as chair, she says she hasn't met Trump since her last meeting early in his presidency | |
8.06pm BST | |
20:06 | |
Refreshingly, Janet Yellen says the Fed doesn’t know why inflation is below target this year. | |
We need to “figures out” if the factors are persistent of transitory, she adds. | |
Yellen says there's been a "miss" this year on inflation target and not sure why | |
8.02pm BST | 8.02pm BST |
20:02 | 20:02 |
Here’s Tom Stevenson, investment director for personal investing at Fidelity International, on the Fed’s balance sheet reduction plan: | Here’s Tom Stevenson, investment director for personal investing at Fidelity International, on the Fed’s balance sheet reduction plan: |
As expected, the Fed has fleshed out its plans for reining in the size of its balance sheet. This has ballooned since the financial crisis on the back of America’s massive quantitative easing stimulus programme. | As expected, the Fed has fleshed out its plans for reining in the size of its balance sheet. This has ballooned since the financial crisis on the back of America’s massive quantitative easing stimulus programme. |
The balance sheet has expanded to $4.5trn since the financial crisis. The plan is to start reducing it from next month and to progressively accelerate the rate at which bonds are returned to the public market. The Fed hopes that by telegraphing its $1trn to $2trn taper, it can avoid unsettling bond and equity markets. | The balance sheet has expanded to $4.5trn since the financial crisis. The plan is to start reducing it from next month and to progressively accelerate the rate at which bonds are returned to the public market. The Fed hopes that by telegraphing its $1trn to $2trn taper, it can avoid unsettling bond and equity markets. |
8.01pm BST | 8.01pm BST |
20:01 | 20:01 |
Yellen reminds the press conference that the Fed has now raised interest rates four times in this cycle, and it still thinks the recovery is on a “strong track”. | Yellen reminds the press conference that the Fed has now raised interest rates four times in this cycle, and it still thinks the recovery is on a “strong track”. |
7.59pm BST | 7.59pm BST |
19:59 | 19:59 |
Q: The Fed is locked into reducing its balance sheet, and raising interest rates in a gradual fashion. So what will you do if economic conditions don’t turn out as you expect? | Q: The Fed is locked into reducing its balance sheet, and raising interest rates in a gradual fashion. So what will you do if economic conditions don’t turn out as you expect? |
Yellen denies that the Fed is ‘locked in’ to a particular path. We are assessing incoming data, and these plans are subject to change. | Yellen denies that the Fed is ‘locked in’ to a particular path. We are assessing incoming data, and these plans are subject to change. |
What won’t change, though, is our commitment to delivering price stability and full employment, she adds. | What won’t change, though, is our commitment to delivering price stability and full employment, she adds. |
7.57pm BST | 7.57pm BST |
19:57 | 19:57 |
Yellen says that the Fed could “stop its balance sheet rolloff” in future, if adjusting interest rates is “insufficient” to respond to changes to the economic outlook. | Yellen says that the Fed could “stop its balance sheet rolloff” in future, if adjusting interest rates is “insufficient” to respond to changes to the economic outlook. |
7.54pm BST | 7.54pm BST |
19:54 | 19:54 |
Q: Is the Fed concerned that markets are at, or close to, record highs? | Q: Is the Fed concerned that markets are at, or close to, record highs? |
Yellen replies that it’s not easy to see how asset prices will affect the economic outlook, but the Fed is “taking account of asset prices when setting monetary policy”. | Yellen replies that it’s not easy to see how asset prices will affect the economic outlook, but the Fed is “taking account of asset prices when setting monetary policy”. |
Question for Yellen about "buoyant" stock market/other rising asset prices & whether it concerns Fed. Response? To sort of dodge question. | Question for Yellen about "buoyant" stock market/other rising asset prices & whether it concerns Fed. Response? To sort of dodge question. |
7.51pm BST | 7.51pm BST |
19:51 | 19:51 |
Onto questions, and the first one is a zinger. | Onto questions, and the first one is a zinger. |
Q: Why the Fed is unwinding its balance sheet when core inflation is consistently below target, and the unemployment rate for Black Americans is 8% (much higher than the 4.4% national average). | Q: Why the Fed is unwinding its balance sheet when core inflation is consistently below target, and the unemployment rate for Black Americans is 8% (much higher than the 4.4% national average). |
Yellen replies that it is a “concern” that inflation is below the 2% target. The Fed still believes it will rise, but will adjust policy if needed. | Yellen replies that it is a “concern” that inflation is below the 2% target. The Fed still believes it will rise, but will adjust policy if needed. |
Asked about sacrificing black/minority employment gains for low inflation, Yellen responded with a recitation of everything on Fed's mind | Asked about sacrificing black/minority employment gains for low inflation, Yellen responded with a recitation of everything on Fed's mind |
7.48pm BST | 7.48pm BST |
19:48 | 19:48 |
Yellen repeats that the Fed’s balance sheet will be shrunk gradually and predictably. | Yellen repeats that the Fed’s balance sheet will be shrunk gradually and predictably. |
It will start by cutting its holdings by up to $10bn per month this autumn; a small change designed to help the markets adjust. | It will start by cutting its holdings by up to $10bn per month this autumn; a small change designed to help the markets adjust. |
This cap will rise to $50bn per month by next autumn. | This cap will rise to $50bn per month by next autumn. |
Janet Yellen says "We do NOT plan on making adjustments to our balance sheet normalization program." pic.twitter.com/WWy9DaCR5a | Janet Yellen says "We do NOT plan on making adjustments to our balance sheet normalization program." pic.twitter.com/WWy9DaCR5a |
But....she also flags up that the Fed could adjust its balance sheet in future, if circumstances demanded it. | But....she also flags up that the Fed could adjust its balance sheet in future, if circumstances demanded it. |
Updated | Updated |
at 7.55pm BST | at 7.55pm BST |
7.42pm BST | 7.42pm BST |
19:42 | 19:42 |
Policy is not on a preset cause, says Yellen - a reminder to the markets that events could yet force the Fed to chance course. | Policy is not on a preset cause, says Yellen - a reminder to the markets that events could yet force the Fed to chance course. |
7.40pm BST | 7.40pm BST |
19:40 | 19:40 |
On interest rates, Yellen says the Federal Fund Rate won’t have to rise much further to get back to a ‘neutral stance’. | On interest rates, Yellen says the Federal Fund Rate won’t have to rise much further to get back to a ‘neutral stance’. |