Fed's Yellen: Interest Rates Not 'Excessively Stimulatory'

Writing in the San Francisco Federal Reserve's Economic Letter, bank president Janet Yellen suggests that there's room for the Fed to lower rates:

The Committee responded to the difficult economic conditions that emerged last year by easing monetary policy substantially, cutting the federal funds rate to 2%, which is more than three full percentage points below where it was just last summer. Although this rate is low by historical standards, I still don't consider the stance of monetary policy to be excessively stimulatory. In light of all of the disruptions to the financial system I described, I consider financial conditions to be more restrictive overall now than when the financial crisis struck a year ago. Policy must be calibrated to push through the substantial headwinds the economy faces

Yellen is not a voting FOMC member. Looking to interest rate futures markets, traders are placing about 1/3 chance of a cut before the end of the year, down from about an 80 percent before the government's move to insure money market mutual funds.