Federal Reserve Chair Janet Yellen conversation with former Fed chairs Ben Bernanke, Alan Greenspan and Paul Volcker.
In a get together with the prior three chairs of the Federal Reserve, Janet Yellen repeated that the Fed remains on path for a gradual set of rate hikes. Yellen said the U.S. consumer, supported by progress in the labor market, is propelling the U.S. economy forward despite global headwinds and that she does not see the December rate hike as a mistake. She said most of her FOMC colleagues expect to overshoot the Fed's long-term 4.5 percent unemployment goal but are not seeking to overshoot the Fed's 2 percent inflation goal. Ben Bernanke said he doesn't see any special risk of a 2016 recession and that the eventual unwinding of the Fed's balance sheet will be straightforward. Yellen said she wants a substantially smaller balance sheet in the long run but that short-term rates will have to move higher before the balance sheet is unwound.
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