“This extraordinary commitment is still
needed and will be for some time, and I believe that view is widely shared by
my fellow policy makers,” Yellen said at a community development conference in Chicago. “The scars from
the Great Recession remain, and reaching our goals will take time.”
So now the Fed chairman is a dove. Earlier in the month she was a hawk.
The word of choice is now to say the economy is filled with "slack".
Is this the forward guidance the market needs? These types of comments just
creates uncertainty and will increase the risk premia in both stock and
bond markets. The central bank cannot solve the employments problems of the
individual. It should solve the problem of risk and uncertainty through having
a well-articulated clear policy. By solving the group problem, the individual
will be helped.
No comments:
Post a Comment