Janet Yellen: Keeping Rates Low for a Considerable Time

The transcript discusses the Federal Reserve's cautious approach to monetary policy, emphasizing data dependency and communication as key tools. It highlights the Fed's efforts to prepare the market for potential interest rate changes by 2017, while maintaining a focus on economic health. The discussion also covers investment strategies in light of market volatility and the Fed's dual mandate of price stability and maximum employment.

What is the main reason the Fed is cautious about changing interest rates?

• They are dependent on economic data.

• They have already decided to increase rates.

• They are focused on international markets.

• They are waiting for a new chairman.

How does the Fed view communication in relation to its policy tools?

• As equally important as interest rate and balance sheet policies.

• As a secondary tool to be used sparingly.

• As less important than interest rate policy.

• As irrelevant to market expectations.

What is the projected Fed funds rate for 2017 according to the dot chart?

• 4.0%

• 3.75%

• 2.5%

• 1.3%

What are the two main objectives of the Fed as mentioned in the transcript?

• High GDP growth and low unemployment.

• Price stability and maximum employment.

• Low inflation and high interest rates.

• Strong dollar and balanced trade.

What is a potential consequence for the market as the Fed implements its policies?

• Decreased market volatility.

• Immediate economic growth.

• Increased market volatility.

• Stable interest rates.