Fed Chair Janet Yellen: the Fed will change the wording of the policy statement when it will raise its interest rate

The Fed Chair Janet Yellen testified before the Senate Banking Committee in Washington on Tuesday:

• "Too many Americans remain unemployed or underemployed, wage growth is still sluggish and inflation remains well below our longer-run objective";
  
• The labour market showed a strong recovery;
  
• Falling oil prices are "a significant overall plus" for the U.S. economy, supporting household spending;
  
• The weakness of other developed economies could slow growth in the U.S.;
  
• The Fed would not hike its interest rate until it "is reasonably confident that inflation will move back over the medium term toward our 2 percent objective";
  
• The word "patient" in the latest policy statement means that the Fed does not intend to hike its interest rate during the two meetings following the release of that statement;
  
• The Fed will change the wording of the policy statement when it will raise its interest rate;
  
• "If economic conditions continue to improve, as the committee anticipates, the committee will at some point begin considering an increase in the target range for the federal funds rate on a meeting-by-meeting basis".
  

Yellen offered no clear signal on when the Fed will hike its interest rate.

The Fed Chair is scheduled to testify on Wednesday before the House Financial Services Committee.