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Th e M Rep o RT | 61 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t SECONDARY MARKET LocaL edition two GSEs purchased between 2005 and 2007. FHFA estimates the worth of the settlement to be about $1.2 billion due to the bonds' current values. The lawsuit, FHFA v. Goldman Sachs & Co., et al., named Goldman Sachs, re- lated companies, and some indi- viduals as defendants, according to FHFA. The suit was settled in the U.S. District Court of the Southern District of New York. "We are pleased to have re- solved these matters," Gregory K. Palm, EVP and general coun- sel of Goldman Sachs, said in a press release. The settlement makes Fannie Mae and Freddie Mac whole on their investment in the RMBS in question, and as part of the settlement, the two GSEs will release certain claims they previ- ously made against Goldman Sachs related to those same RMBS, FHFA explained. The settlement with Goldman Sachs was the 16th of 18 lawsuits FHFA has filed since 2011 seeking to recover losses incurred by the GSEs on private-label RMBS issued prior to the housing downturn. Fed chair signals caution as economy improves Yellen remains as dovish as ever in her latest address. WYOMING // Federal Reserve Chair Janet Yellen is calling for moderation in monetary policy as the economy shows signs of a slow but steady recovery. Speaking from Jackson Hole, Wyoming, in late August, the central banker hailed a falling unemployment rate and improv- ing payroll figures but held back from calling improving indicators significant enough to notch up still-low interest rates. "These developments are encouraging, but it speaks to the depth of the damage that, five years after the end of the reces- sion, the labor market has yet to fully recover," Yellen said. The Fed chair indicated employment levels would play a major role in the central bank's decision about when to move on interest rates. She said the Federal Open Market Committee plans to continue easing asset purchases toward suspension in October but only with a "wide range" of mea- surable information available that shows stability in the economy. Under the larger Federal Reserve, the influential Federal Open Market Committee helms open-market activities like the purchases and sales of Treasury securities. Recent minutes showed the committee continues to see infla- tion running "persistently below 2 percent"—enough to back mea- sures like the widely anticipated hike in federal interest rates, which have been kept artificially low since the Great Recession. The committee pledged in July that it would increase the Fed's mortgage-backed securities hold- ings by $10 billion per month, a notch down from the $15 billion per month previously in effect. Longer-term Treasuries would meanwhile roll in at $15 billion each month rather than $20 bil- lion, with the committee expect- ing the Fed's increased securities holdings to exert "downward pressure" on interest rates and buttress mortgage markets. Paul Dales, a senior U.S. econo- mist with Capital Economics, said Yellen's address in Jackson Hole was far from a seismic event in how she felt about interest rates. If the committee's July minutes "suggested that the Fed had taken two steps closer to raising interest rates, then today's speech ... could be interpreted as it tak- ing one step back," Dales said in analysis shared with the media. Capital Economics projects the simple arithmetic of votes from other committee members will likely outnumber and compel the Fed chair to hike interest rates by March. "Put simply, she continues to believe there is more slack in the [labor] market than the unem- ployment rate suggests," Dales said. "These developments are encouraging, but it speaks to the depth of the damage that, five years after the end of the recession, the labor market has yet to fully recover." —Janet Yellen