Janet Yellen defines a statistical path...

Chair Janet L. Yellen

At the City Club of Cleveland, Cleveland, Ohio

July 10, 2015

Recent Developments and the Outlook for the Economy

"Some portion of the greater share of workers who are part time for economic reasons may reflect structural rather than cyclical factors. For example, the ongoing shift in employment away from manufacturing and toward services, a sector which historically relied more heavily on part-time workers, may be boosting the share of part-time jobs.  

"We expect the drag on domestic economic activity from these factors to ease over the course of this year, as the value of the dollar and crude oil prices stabilize, and I anticipate moderate economic growth, on balance, for this year as a whole.

 "Based on my outlook, I expect that it will be appropriate at some point later this year to take the first step to raise the federal funds rate and thus begin normalizing monetary policy.

I currently anticipate that the appropriate pace of normalization will be gradual, and that monetary policy will need to be highly supportive of economic activity for quite some time. 

"We will be watching carefully to see if there is continued improvement in labor market conditions, and we will need to be reasonably confident that inflation will move back to 2 percent in the next few year."

(http://www.federalreserve.gov/newsevents/speech/yellen20150710a.htm)

Our view is that the US looks set for good growth.  It is data and not IMF that Fed will heed to. 


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