Tagged: Yellen

Yellen the hawk

The Fed economic projections were dovish, with inflation forecasts for next year slashed, while the median dot fell for the first time since they were introduced:

CPI:
2015 1.3 from 1.75
2016 1.85 unch
2017 1.9 from 1.95

Unemployment:
2015  5.25 from 5.5
2016  5.1 from 5.25
2017  5.1 unch

GDP unch

Dots:
2015 median has come down by 25bp
2016 down by 37.5bp
2017 down by 12.5bp

The statement added in the word “patient” while also retaining “considerable time” (!) – they really didn’t want to frighten the horses:

‘Based on its current assessment,

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Stanley Fischer speaks

SUMMARY:

  • The labour market still looks weak
  • The housing market is still vulnerable to higher rates
  • So the US may be facing a ‘secular slowdown’

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Schizophrenic #FOMC

How to reconcile these two recent comments from Janet Yellen?

‘Because a resilient financial system can withstand unexpected developments, identification of bubbles is less critical.’ (2 July)

While prices of real estate,

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