• Fed sees only gradual decline in jobless rate to 7% by the end of 2014
  • Language of Fed statement conveys determination to keep mon pol highly accommodative well into recovery
  • Easy policy poses some risks but so does insufficient action
  • Views balance of risks as calling for highly accommodative policy to support stronger recovery, faster job growth

Yellen emphasizing unemployment staying above 7% is the equivalent to her saying QE will continue for an extended period. Yellen is a dove, for sure, but her comments represent the core of the Fed.