Reuters - Video

EDITION: U.S. | U.K. | IN

Top News

Yellen signals Fed nearer to rate rise

Wednesday, Mar 19, 2014 - 03:04

March 19 - Federal Reserve Chair Janet Yellen's first post-FOMC press conference shocked investors as she hints the Fed's first rate hike could come early in 2015. Conway G. Gittens reports.

▲ Hide Transcript

View Transcript

Remember that 6-1/2 percent jobless benchmark - forget about it! In Janet Yellen's first meeting as Fed chair, policymakers decided the jobless rate alone is no longer enough to signal when the Fed will begin hiking interest rates. But it's Yellen's startling comments in the press conference as to how soon rates could rise after bond purchases cease that knocked Wall Street off its feet. SOUNDBITE: FEDERAL RESERVE CHAIR JANET YELLEN (ENGLISH) SAYING: "The language that we use in this statement is considerable period, so this is the kind of term it's hard to define but probably means something along the order of around six months or that type of thing. But you know it depends. What the statement is saying, as the statement is saying, it depends on what conditions are like. We need to see where the labor market is, how close are we to our full-employment goal. That would be a complicated assessment, not just based on a single statistic and how rapidly we are moving toward it. Are we moving close and moving fast or are we getting closer but moving slowly." But the number of policy makers expecting rates to begin moving higher next year is on the rise - hitting 13 at this meeting compared to 12 at the meeting in December. However, the Fed's economic growth projections for the next two years have changed little, suggesting the Fed doesn't expect inflation to ramp up to a level that would require a spike in interest rates any time soon. SOUNDBITE: FEDERAL RESERVE CHAIR JANET YELLEN (ENGLISH) SAYING: "The committee is mindful that inflation running persistently below its objective could pose risks to economic performance. The committee also recognizes, however, that policy actions tend to exert pressure on inflation that is manifest only gradually over time. The FOMC will continue assessing incoming data carefully to ensure policy is consistent with attaining the FOMC's longer run objectives of maximum employment and inflation of two percent." Despite that assurance, markets interpreted Janet Yellen's first run out of the gate one way. Anthony Valeri of LPL Financial: SOUNDBITE: ANTHONY VALERI, SENIOR VP OF FIXED INCOME RESEARCH, LPL FINANCIAL (ENGLISH) SAYING: "I think it was a slightly, in terms of bonds, it was a slightly more negative interpretation. It basically reiterated the fact that the Fed's on pace to remove accommodative policy and that eventually they are going to raise interest rates. I think one of the most negative aspects of today's Fed meeting was that the Fed increased the timing or the amount of rate hikes that we're going to see and pushed them forward." Yellen says the new guidance is all part of the Fed's plan to provide more information, but judging from the market's confusion - this info may be too much for the market to bear.

Yellen signals Fed nearer to rate rise

Wednesday, Mar 19, 2014 - 03:04

Money »

S&P 500 closes at new high S&P 500 closes at new high

Thu, Aug 21, 2014 - (1:24)

S&P 500 just shy of record S&P 500 just shy of record

Wed, Aug 20, 2014 - (2:23)

Apple hits $100 a share Apple hits $100 a share

Tue, Aug 19, 2014 - (2:06)

Nasdaq closes at 14-year high Nasdaq closes at 14-year high

Mon, Aug 18, 2014 - (2:23)

Putin puts Wall Street in buying mood Putin puts Wall Street in buying mood

Thu, Aug 14, 2014 - (2:10)

We've become a promotional culture-RetailMeNot's Bodge We've become a promotional...

Thu, Aug 14, 2014 - (4:39)

Dow back to positive territory for year Dow back to positive territory for year

Wed, Aug 13, 2014 - (2:18)

Markets cheer Russia's Ukraine exit Markets cheer Russia's Ukraine exit

Fri, Aug 08, 2014 - (1:50)

Russia, Iraq push Dow to three-month low Russia, Iraq push Dow to three-month low

Thu, Aug 07, 2014 - (2:27)

Wall Street gains but telecom disconnected Wall Street gains but telecom disconnected

Wed, Aug 06, 2014 - (2:28)

Stocks zapped by energy weakness Stocks zapped by energy weakness

Tue, Aug 05, 2014 - (2:46)

The Exchange »

The Exchange: Hot commodity The Exchange: Hot commodity

Wed, Jul 16, 2014 - (9:25)

The Exchange: Constitutional crusade The Exchange: Constitutional crusade

Wed, Jun 25, 2014 - (11:35)

The Exchange: The value of money The Exchange: The value of money

Mon, Jun 02, 2014 - (9:53)

The Exchange: China’s Second Continent The Exchange: China’s Second Continent

Tue, May 27, 2014 - (9:35)

The Exchange: A master of business arts The Exchange: A master of business arts

Thu, May 08, 2014 - (8:24)

The Exchange: America's bankrupt cities The Exchange: America's bankrupt cities

Mon, May 05, 2014 - (8:52)

The Exchange: Let the rocking commence The Exchange: Let the rocking commence

Tue, Apr 08, 2014 - (8:13)

The Exchange: The Moneyball fallacies The Exchange: The Moneyball fallacies

Mon, Mar 24, 2014 - (9:54)

Is doing good a good business? Is doing good a good business?

Mon, Mar 17, 2014 - (7:38)

Reuters Investigates »

Re-homing victim: "I could have been dead" Re-homing victim: "I could have been dead"

Wed, Feb 19, 2014 - (8:24)

Cops and loggers in the Amazon rainforest Cops and loggers in the Amazon rainforest

Fri, Jan 10, 2014 - (4:01)

"Passed around like a dog" "Passed around like a dog"

Thu, Aug 29, 2013 - (6:32)

Adopted, then abandoned online Adopted, then abandoned online

Thu, Aug 29, 2013 - (13:21)

How the DEA keeps its secrets secret How the DEA keeps its secrets secret

Mon, Aug 05, 2013 - (1:36)

How education lost its role as the great equalizer - Reuters Investigates How education lost its role as the great...

Mon, Dec 17, 2012 - (7:52)

Jihad Jane: From abused child to American jihadist - Reuters Investigates Jihad Jane: From abused child to American...

Sat, Dec 08, 2012 - (10:01)

Jihad Jane: The order to kill - Reuters Investigates Jihad Jane: The order to kill - Reuters...

Sun, Dec 09, 2012 - (10:39)

Moving Pictures »

"Old timers" sail the Chesapeake Bay "Old timers" sail the Chesapeake Bay

Mon, Aug 11, 2014 - (2:27)

Burned memories Burned memories

Fri, Aug 08, 2014 - (3:02)

Images of July Images of July

Thu, Jul 31, 2014 - (1:20)

World Cup: passion on the pitch World Cup: passion on the pitch

Fri, Jul 11, 2014 - (1:00)

A refugee in America gives back A refugee in America gives back

Wed, Jul 02, 2014 - (3:25)

A long search for refuge A long search for refuge

Fri, Jun 20, 2014 - (3:04)

World Cup: Around the globe in 50 goals World Cup: Around the globe in 50 goals

Fri, Jun 06, 2014 - (1:08)

VIVID – Sydney’s spectacle of light VIVID – Sydney’s spectacle of light

Fri, May 30, 2014 - (1:37)

The week that changed Boston The week that changed Boston

Mon, Apr 14, 2014 - (3:28)