Saturday, October 25, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Yellen: US economy still needs help from Fed

By
From page B6 | June 19, 2014 |

WASHINGTON — The U.S. economy still isn’t healthy enough to grow at a consistently strong pace without the Federal Reserve’s help.

That was the message Fed Chair Janet Yellen sent Wednesday at a news conference after the central bank ended a two-day policy meeting.

Yellen made clear that despite a steadily improving job market and signs of creeping inflation, the Fed sees no need to raise short-term interest rates from record lows anytime soon.

Her remarks followed a statement from the Fed that it would further slow the pace of its long-term bond purchases. The bond purchases have been intended to keep long-term loan rates low. But the Fed offered no clear signal about when it will start raising its benchmark short-term rate.

Most economists think a rate increase is at least a year away despite signs of rising inflation. And at her news conference, Yellen downplayed inflation concerns.

Recent inflation figures are “noisy,” Yellen said.

Her comment suggested that the Fed doesn’t see inflation as a threat that it would soon need to combat through higher interest rates.

David Jones, chief economist at DMJ Advisors, said the Fed and Yellen made plain that the central bank still intends to keep rates low for a considerable time.

“The Fed is saying the economy still needs help and that inflation is not a threat at the moment,” Jones said. “Yellen is a lot more worried at the moment about how the job market is behaving than how inflation is behaving.”

The Fed’s statement was nearly identical to the one it issued after its last meeting in April. It reiterated its plan to keep short-term rates low “for a considerable time” after it ends its bond purchases.

It also downgraded its forecast for growth for 2014, acknowledging that a harsh winter caused the economy to shrink in the January-March quarter. In addition, the Fed barely raised its forecast for inflation.

The Fed expects growth to be just 2.1 percent to 2.3 percent this year, down from 2.8 percent to 3 percent in its last projections in March. It thinks inflation will be a slight 1.5 percent to 1.7 percent by year’s end, near its earlier estimate.

It foresees the unemployment rate, now at 6.3 percent, dipping to between 6 percent and 6.1 percent by the end of this year. That’s a slight improvement from the Fed’s forecast in March, when it predicted that unemployment would be as high as 6.3 percent at year’s end.

Stock investors appeared pleased with the Fed’s message that rates would remain low. Major stock indexes surged more than half a percentage point, with the Standard & Poor’s 500 index reaching a record. And the yield on the 10-year Treasury note dipped to 2.59 percent from 2.65 percent late Tuesday.

“The last thing that Janet Yellen wants is for the market to think she’s anywhere close to tightening,” said David Robin, managing director at the brokerage Newedge. “She nailed it.”

The Fed’s decision to further pare its bond buying means its monthly purchases of long-term bonds will be reduced from $45 billion to $35 billion starting in July. It marked the fifth cut in the purchases since December as the Fed slows the support it’s providing the economy.

The bond buying is expected to end altogether by fall.

The Fed’s statement was approved on an 11-0 vote, with support from the Fed’s three newest members: Vice Chairman Stanley Fischer, board member Lael Brainard and Loretta Mester, the new president of the Fed’s regional bank in Cleveland.

The slight changes in the Fed’s statement pointed to signs of a strengthening economy now that a brutal winter has passed. The statement said economic activity had “rebounded,” with gains in the job market, household spending and business investment.

The statement signaled no concern about the recent acceleration in inflation. It repeated language on inflation in which the Fed said it was still concerned that inflation remained below its 2 percent target.

 

The Associated Press

The Associated Press

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

 
 
Cut-a-thon to help fight cancer, abuse

By Susan Hiland | From Page: A3

 
Fall Harvest Festival brings children back to school

By Susan Hiland | From Page: A3 | Gallery

 
Optimist Club brings youth together for Halloween golf

By Amy Maginnis-Honey | From Page: A3

School board candidates forum set next week

By Susan Winlow | From Page: A4

 
 
Staying active may prolong your life

By Scott Anderson | From Page: B8

 
Suisun City police log: Oct. 23, 2014

By Susan Hiland | From Page: A9

.

US / World

Suspect arrested in death of 2 California deputies

By The Associated Press | From Page: A1, 5 Comments

 
KC-10 from Travis lands in Houston, smoke in cockpit

By The Associated Press | From Page: A3, 1 Comment

Reagan astrologer, Joan Quigley, dies at 87

By The Associated Press | From Page: A4, 2 Comments

 
Jury says castrated sex offender should be freed

By The Associated Press | From Page: A4

School gunman was Homecoming prince, students say

By The Associated Press | From Page: A5, 2 Comments

 
Lava creeps toward road on Hawaii’s Big Island

By The Associated Press | From Page: A5

Remains belong to missing Virginia student

By The Associated Press | From Page: A5

 
Dallas nurse receives thanks, hug from Obama

By The Associated Press | From Page: A5, 14 Comments

NY, NJ order Ebola quarantine for doctors, others

By The Associated Press | From Page: A9

 
Gunman in Canada attack complained about mosque

By The Associated Press | From Page: A10

Egypt declares emergency in northern Sinai

By The Associated Press | From Page: A10

 
Militant group said to be using chlorine bombs

By The Associated Press | From Page: A10, 1 Comment

Putin accuses US of undermining global stability

By The Associated Press | From Page: A10, 1 Comment

 
.

Opinion

Return Garamendi to Congress

By Daily Republic | From Page: A8, 27 Comments

 
Editorial Cartoons: Oct. 25, 2014

By Daily Republic Syndicated Content | From Page: A8

SEIU shouldn’t own Board of Supervisors

By Letter to the Editor | From Page: A8, 7 Comments

 
Vote, and make a difference

By Letter to the Editor | From Page: A8, 3 Comments

Yes on Measure A

By Letter to the Editor | From Page: A8, 4 Comments

 
Spering best choice for county supervisor

By Daily Republic | From Page: A8, 8 Comments

.

Living

Today in History: Oct. 25, 2014

By The Associated Press | From Page: A2

 
Community Calendar: Oct. 25, 2014

By Susan Hiland | From Page: A2

Horoscopes: Oct. 25, 2014

By Holiday Mathis | From Page: A7

 
My mother-in-law wants me to convert to Catholicism, but I don’t want to

By Kathy Mitchell and Marcy Sugar | From Page: A7

Hello Kitty turning 40, and the birthday bash will be ‘supercute’

By Mcclatchy-Tribune News Service | From Page: B8

 
.

Entertainment

TLC cancels its ‘Honey Boo Boo’ series

By The Associated Press | From Page: B9, 1 Comment

 
P.D. James’ riff on Jane Austen comes to TV

By The Associated Press | From Page: B9

TVGrid

By Daily Republic Syndicated Content | From Page: B9

 
.

Sports

Vintage rolls past Armijo, 55-8

By Mike Corpos | From Page: B1

 
Mustangs fall flat in rout by Wildcats

By Marcus Lomtong | From Page: B1, 4 Comments

Royals beat Giants 3-2 for 2-1 World Series lead

By The Associated Press | From Page: B1 | Gallery

 
Vargas to take on Vogelsong in Game 4 of Series

By The Associated Press | From Page: B1 | Gallery

Falcons hang with Wolves in 34-8 setback

By Paul Farmer | From Page: B1, 1 Comment | Gallery

 
Hamilton helps Vanden sink Vallejo, 35-0

By Nick DeCicco | From Page: B1

Unfazed, 49ers coach Jim Harbaugh doing it his way

By The Associated Press | From Page: B2

 
Lloyd leads US women past Mexico 3-0

By The Associated Press | From Page: B2

Raiders’ Woodley, Young expected to be placed on IR

By The Associated Press | From Page: B2

 
Henley’s putting gets him lead at Sea Island

By The Associated Press | From Page: B2

Judge halts New Jersey’s sports betting plan

By The Associated Press | From Page: B2

 
Joe Maddon exercises opt-out, won’t return to Rays

By The Associated Press | From Page: B2

Jamie McMurray bests Chase drivers to win pole

By The Associated Press | From Page: B2 | Gallery

 
Attorney: NFL, Ravens not helping union in Rice probe

By The Associated Press | From Page: B2

SCC women’s soccer team falls to Mendocino 3-1

By Daily Republic staff | From Page: B2

 
This date in sports history for Saturday, Oct. 25, 2014

By The Associated Press | From Page: B3

 
.

Business

US official: Auto safety agency under review

By The Associated Press | From Page: B4

 
Ford profit falls in third quarter on truck costs

By The Associated Press | From Page: B4

Procter & Gamble taking out its batteries

By The Associated Press | From Page: B4

 
UPS expects double-digit surge in Dec shipments

By The Associated Press | From Page: B4

US new-home sales close to flat in September

By The Associated Press | From Page: B4

 
.

Obituaries

Mark Dean Lindsay

By Nancy Green | From Page: A4, 1 Comment

 
.

Comics

Frank and Ernest

By Daily Republic Syndicated Content | From Page: A6

 
Sally Forth

By Daily Republic Syndicated Content | From Page: A6

Wizard of Id

By Daily Republic Syndicated Content | From Page: A6

 
Blondie

By Daily Republic Syndicated Content | From Page: A6

Zits

By Daily Republic Syndicated Content | From Page: A6

 
For Better or Worse

By Daily Republic Syndicated Content | From Page: A6

Peanuts

By Daily Republic Syndicated Content | From Page: A6

 
Pickles

By Daily Republic Syndicated Content | From Page: A6

Beetle Bailey

By Daily Republic Syndicated Content | From Page: A6

 
B.C.

By Daily Republic Syndicated Content | From Page: A6

Dilbert

By Daily Republic Syndicated Content | From Page: A6

 
Get Fuzzy

By Daily Republic Syndicated Content | From Page: A6

Rose is Rose

By Daily Republic Syndicated Content | From Page: A6

 
Garfield

By Daily Republic Syndicated Content | From Page: A6

Baldo

By Daily Republic Syndicated Content | From Page: A6

 
Baby Blues

By Daily Republic Syndicated Content | From Page: A6

Bridge

By Daily Republic Syndicated Content | From Page: A7

 
Sudoku

By Daily Republic Syndicated Content | From Page: A7

Word Sleuth

By Daily Republic Syndicated Content | From Page: A7

 
Cryptoquote

By Daily Republic Syndicated Content | From Page: A7

Crossword

By Daily Republic Syndicated Content | From Page: A7

 
.

Home Seller 10/25/14

Real estate transactions for Oct. 25, 2014

By Daily Republic | From Page: HSR2