여왕비둘기 옐런 여사의 12월 FOMC 프레스 컨퍼런스

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“This action marks the end of an extraordinary 7-year period during which the federal funds rate was held near zero to support the recovery of the economy from the worst financial crisis and recession since the Great Depression,” said Yellen.

Yellen’s trying to balance the message that, yes, the economy has improved, but it’s weak enough that very low interest rates are still needed.

In her words: “With the economy performing well, and expected to continue to do so, the committee judged that a modest increase in the federal funds rate target is now appropriate, recognizing that even after this increase, monetary policy remains accommodative.”

“So far this year, a total of 2.3 million jobs have been added to the economy, and over the most recent three months, job gains have averaged an estimated 208,000 per month ? 218,000 per month, similar to the average pace since the beginning of the year,” Yellen said.

Yellen says, yes, inflation’s well below 2%, but “transitory” factors ranging from weak energy prices to the strong dollar are holding it down, and eventually will recover.

“Market-based measures of inflation compensation remain near historically low levels, although the declines in these measures over the past year and a half may reflect changes in risk and liquidity premiums, rather than an outright decline in inflation expectations,” Yellen said.

Shorter Yellen: We’re hiking now to avoid more hikes later.

Yellen says it wasn’t the Fed’s credibility, but rather the data, which led the Fed to hike rates. Recall that at the last meeting, in October, the Fed raised the stakes by saying a hike would be considered at the next (e.g. this) meeting. So some skeptics said the Fed boxed itself into a corner.

Since then, the U.S. economic data has been mixed ? pretty good news on the jobs front, very decent numbers on the services side, and frankly awful data from manufacturing.

Yellen points out that the impact from rate hike has a lagged impact. The Fed is aiming for the economy nine months from now.

“What we would like to avoid is a situation where we have waited so long that we are forced to tighten policy abruptly, which risks aborting what I would like to see as a very long running and sustainable expansion,” Yellen said.

Yellen refuses to say that inflation will have to rise for the Fed to raise interest rates again. She’s basically saying that if the Fed doesn’t think inflation will rise, they won’t hike, but they won’t be locked into whatever the freshest readings of PCE or CPI are.

Yellen says she’s surprised by further downward move in oil prices. But all oil has to do is stabilize for inflation to rise (all else being equal).

Yellen acknowledges that inflation has missed the Fed’s target for three years. But, she points out, the Fed pre-2008 ignored inflation that overshot 2% (though that wasn’t a target in those years.)

One of the more interesting Yellen pronouncements today: “I think it’s a myth that expansions die of old age. I do not think that they die of old age,” she says.

Yellen’s talking about problems in the junk bond world ? and basically announces an SEC investigation from her platform.

Specifically calling out the Third Avenue credit fund, “it had very concentrated positions and especially risky and liquid bonds, and it had been facing very significant redemption pressures. My understanding is that the SEC is in touch with Third Avenue, and as you probably know, the SEC has proposed some reforms to address what’s a structural problem of liquidity mismatch in open end mutual funds.”

With other reporters focusing on the risk of the recession, MarketWatch’s Greg Robb asked about the upside risks to the economy.

“Consumers are in much healthier financial condition. Their income prospects have improved. We see them buying a lot of cars. Housing has been recovering very slowly. But the demographics would point to considerable upside for residential investment,” she says.

Yellen adds emerging-market economies also are recovering.

The press conference has ended. The final question Yellen received was about wage growth, and she said there were incipient signs of increasing pay.

Well, Yellen’s Brooklyn accent was poetic to traders ? the Dow’s now up 245 points. She made it clear the Fed wasn’t in a rush to aggressively hike interest rates. That’s not to say the data won’t force the central bank’s hand, but for now, markets are happy