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Yellen: These dots are going to move up and down

  • "We are fully committed to the 2% (inflation) objective," says Janet Yellen, responding to a question about Kocherlakota's dovish dissent. She reminds monetary policy works with a lag and an inflation rate below 2% at a given time does not preclude the FOMC from believing it's on its way to meeting the target.
  • Asked about the "upward drift" in Fed Funds rate expectations - 11 of 16 members see Fed Funds 1% or above at the end of 2015 vs. just 7 who thought so last December. Don't read too much into those "dot plots," says Yellen (see page 3 of projections). "I can't speak for why people write down what they do." Focus instead, she says, on the FOMC statement, and that indicates a "shallower glide path" for rates (though markets aren't buying that a bit for now).
  • Earlier coverage of Yellen and the FOMC
Comments (7)
  • Archman Investor
    , contributor
    Comments (2518) | Send Message
     
    "FED DROPS 6.5% JOBLESS THRESHOLD FOR RAISING FED FUNDS RATE"

     

    And why? Because they know that real unemployment is double digits, participation rate is awful and there are 50 million still on food stamps.

     

    Easy money to continue full tilt-a-whirl regardless of all the "talk".

     

    EOM.
    19 Mar 2014, 03:15 PM Reply Like
  • Salliberto
    , contributor
    Comments (4) | Send Message
     
    I like your insight here. She mentioned the U6, which I applaud. It is a real figure that the media does not discuss. Underemployment is a big issue as well.
    19 Mar 2014, 04:48 PM Reply Like
  • june1234
    , contributor
    Comments (2869) | Send Message
     
    Because she did a Ben from last May when she said today she would raise rates 6 months from the end of QE or March 15.
    19 Mar 2014, 04:03 PM Reply Like
  • Matthew Davis
    , contributor
    Comments (4070) | Send Message
     
    She clearly stated she uses the U6 number as her indicator. UE rate 12.6%
    19 Mar 2014, 05:25 PM Reply Like
  • sethmcs
    , contributor
    Comments (3352) | Send Message
     
    Why use U6 figure? There is a lot of deadwood in that figure. No business wants to hire these people. The supply of people who want to work determines the wage cost balance and potential for wage inflation.
    19 Mar 2014, 10:15 PM Reply Like
  • Matthew Davis
    , contributor
    Comments (4070) | Send Message
     
    Ask her, in the Q&A she was asked what she uses, and she said the U6.
    19 Mar 2014, 10:37 PM Reply Like
  • Charvo
    , contributor
    Comments (29) | Send Message
     
    The Fed is going to continue to maintain an easing stance until inflation rears its head in terms of commodity inflation. It happened in 2007.

     

    If the Fed really wants to get inflation going, they could buy household loans. The ECB is considering that. That right there would be a shot in the arm to the liquidity situation for many families. However, many of these household loans will never be paid back.
    20 Mar 2014, 01:43 AM Reply Like
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