Yellen: Fed Expects Gradual Interest Rate Hikes

The transcript discusses the current setting for monetary policy, emphasizing a cautious approach in raising the federal funds rate due to below-target inflation and mixed economic indicators. It highlights the limited room for rate reduction if inflation remains low and the potential for rate increases if the economy overheats. The FOMC anticipates gradual rate increases, considering economic headwinds and projections for the federal funds rate to remain below long-term levels. The committee expects economic conditions to improve, warranting gradual rate adjustments.

What factors are considered when setting monetary policy according to the text?

How does the committee view the potential for inflation to move above 2%?

What headwinds are mentioned that affect U.S. economic activity?

What are the expected economic conditions that would warrant gradual increases in the federal funds rate?

What is the anticipated federal funds rate at the end of this year as per the FOMC participants?