Yellen Q&A: We're generally pleased with how the economy is doing


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    Comments from the Chair in the Q&A

    • Seeing 'definite' evidence the economy picking up

    Like what? The data has been sliding.

    • Economy has a little more room to run than might have been previously thought

    She's saying the Fed has more time to wait-and-see before it has to worry about inflation

    • Most agreed that the case for a hike was stronger
    • Mostly agreed we would like to see additional progress before hiking
    • We're going to watch for additional evidence
    • Most anticipate one hike will be appropriate this year
    • If we continue on the course for jobs without any shocks, I expect a hike this year
    • Our assessment of monetary policy is somewhat accommodative

    The bolded is hawkish. She said that not much needs to happen to justify a hike. No shocks and jobs growth around 150K. That's a low bar.

    • There is less Fed disagreement than you might think
    • We're struggling with difficult issues like what the new normal is
    • Important to have independent-minded people and different views
    • The FOMC does not suffer from groupthink

    "Our organization suffers from groupthink" - said no head of an organization ever.

    •  "Partisan politics plays no role in our decisions about the appropriate stance of monetary policy."
    • Every meeting is live, including November

    I'll believe that if they hike Nov 2.

    • Commercial real estate prices have caught our eye
    • Asset values not out of line with historical norms
    • The Fed doesn't want to cause downside risks for jobs market
    • There are also risks that inflation doesn't get back to 2%
    • There are risks of waiting too long to hike
    • It's tough to judge which is the more-serious risk, we're all struggling with it
    • I can't recall any meeting where politics has been discussed

    The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

    This article appears in: Investing , Forex

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