Hilsenrath: Yellen is a Very Methodical Person, Expect Her to Stay the Course on Rate Guidance

FOX Business Network (FBN) contributor Jon Hilsenrath spoke with FOX Business Network's Maria Bartiromo about the Federal Reserve ahead of today's FOMC decision at 2PM ET today. When asked whether interest rates will stay low for a considerable amount of time, Hilsenrath said, "Janet Yellen is a very methodical person, a very deliberate person and the fact that they have been telegraphing that they are going to change this guidance suggests that she is probably inclined to stay the course." Hilsenrath went on to say, "the wild card for her is that oil prices have dropped so much, inflation in down markets are turbulent."

Excerpts of the interview are below:

On whether interest rate will stay low for a considerable amount of time:

"They have been talking about it for months. We interviewed Stanley Fischer, the number two at the Fed, and he suggested that they could get rid of, you know, Janet Yellen is a very methodical person, a very deliberate person and the fact that they have been telegraphing that they are going to change this guidance suggests that she is probably inclined to stay the course. The wild card for her is that oil prices have dropped so much, inflation in down markets are turbulent you know, do they flinch and say they don't want to do anything right now and see how things develop. I think given Janet Yellen's style, she's the stay the course kind of person and this is what they have been telegraphing."

On deflation:

"This is why the Fed looks at something called core inflation which excludes food and energy prices because food and energy, particularly energy are very volatile and they could give you head fakes. We got head fakes when energy prices went way up in 2008 and then collapsed and it might be the case that this is another head fake. If you look underneath the surface, core inflation excluding food and energy we got a report today that suggests it's kind of stable, it's below the Fed's two percent goal, but it's around one and a half percent right now, maybe a little bit higher, so I think the Fed is going to take some comfort in that. That we're not seeing some big deflationary environment, which they're starting to worry about in Europe and Japan."

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