Yellen continues to take questions from reporters:

  • I don't see anything to suggest a negative outcome for the US
  • We want to eventually operate with a much smaller balance sheet
  • Fed studying long-run framework for balance sheet

On high yield:

  • Spreads in high yield have been widening since 2014, partly due to oil
  • Third Avenue was an unusual fund

On hike:

  • We are starting early and gradually because we don't want to cause a recession
  • We have considered the risk of moving too early
  • Abrupt tightening is the usual reason central banks cause recessions
  • This decision reflects our confidence in the US economy
  • Longer term rates unlikely to move very much

On persistent 'transitory' inflation

  • If we conclude structural factors are holding down inflation, we would take action
  • We would need to see a sustained departure from 2% inflation goal
  • Fed looks at range of inflation statistics

On the upside economic risks:

  • US consumers are in healthier conditions
  • Demographics point to considerable upside in housing and residential investment
  • Recent growth in emerging markets have strengthened

On path of rates:

  • Strongly doubt there will be evenly spaced rate hikes
  • We will be data dependent
  • Main reason we lowered our PCE forecast was stronger dollar
  • I don't see interpretation of inflation and models as having fundamentally changed
  • All forecasting models are "not perfect"

Wages:

  • We may be seeing some insipient signs of wage growth
  • I hate to say it's a firm trend, we've been disappointed in the past

So far, there have been no strong headlines in the press conference. Yellen is a master of speaking endlessly without saying anything meaningful.

Ok, that's all she wrote from the Fed for 2015.