Chairperson Yellen offered her assessment of the US economy in a speech to Economic Club of Washington. First, the good news. Growth, while moderate, is still positive, printing at 2%-2.5% for the first three quarters of 2015. And real final domestic purchases were over 3% in the 3Q. This tells us that consumers continue to spend and businesses are investing.Now the bad news:

Foreign economic growth has slowed, damping increases in U.S. exports, and the U.S. dollar has appreciated substantially since the middle of last year, making our exports more expensive and imported goods cheaper.

This weakness also plays into the weaker than desired inflation reading:

The stronger dollar has pushed down the prices of imported goods, placing temporary downward pressure on core inflation

And, despite unemployment rate’s drop to 5%, the labor market still has some slack, as evidenced by the low labor-force participation rate and weak wage growth. 

Most importantly, she offered the following projections for growth:

I anticipate continued economic growth at a moderate pace that will be sufficient to generate additional increases in employment, further reductions in the remaining margins of labor market slack, and a rise in inflation to our 2 percent objective. I expect that the fundamental factors supporting domestic spending that I have enumerated today will continue to do so, while the drag from some of the factors that have been weighing on economic growth should begin to lessen next year. Although the economic outlook, as always, is uncertain, I currently see the risks to the outlook for economic activity and the labor market as very close to balanced.

The basis for her projections can be found in the FRBNY DSGE Model Forecast for November.Overall, she argues for continued moderate growth with a slight inflation increase over the next two years.Fed President Lacker agrees with this assessment.

Fed President Evans offers a more dovish view, primarily due to inflation weakness: