[Yellen] said the long-run unemployment rate is probably 4.75 percent, just above the current 4.7 percent. Inflation is "inching back" toward the Fed's 2 percent goal, which has remained elusive even as the economy has stayed out of recession for nearly eight years and unemployment is at its lowest level since late 2007.

Despite the economic improvements, the Fed has remained cautious. "Right now our foot is still pressing on the gas pedal, though, as I noted, we have eased back a bit," Yellen said.


The funds rate, which banks charge to lend to each other overnight, likely will be at 3 percent by the end of 2019, a target that Yellen acknowledged is "a full percentage point lower than our estimate just three years ago."

The Fed looks set to undershoot -- as they almost always do in rate-rise cycles. This is probably a major reason that gold usually rallies hard after rate hikes begin -- because it's too little, too late.

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