The fed funds target should go up once this year if "no new major risks" pop up and the economy continues on its current course, Federal Reserve Board Chair Janet Yellen said Wednesday.
The case for a hike is "stronger," but the Federal Open Market Committee decided it was "sensible" to wait for continued progress before raising rates.
Waiting is possible because neither the economy nor the labor market is "overheating," she said. But, she expects "gradual" rate increases and removal of "modestly accommodative" monetary policy. The neutral nominal fed funds rate is "quite low" suggesting there's "little risk of falling behind the curve in the near future."
She acknowledged the median path expressed in the summary of economic projections revised down a quarter to a half percentage point.
"Partisan politics plays no role in our decision" on monetary policy, Yellen asserted in response to a question, adding that the November meeting is live.
The decision not to raise rates at this meeting, Yellen said, "does not reflect a lack of confidence in the economy."
