NOT MUCH

In Texas there's a popular dance called the Texas Two-step

At the Federal Reserve Bank in Washington there's another dance going on, the Yellen Half-step.

Some apparent Yellen fans, like today's editorial in the Financial Times, "Yellen's 'patient' retreat from zero interest rates," note: "Fed chair is right to be open-minded about the turn in US cycle."

Open-minded in some quarters is synonymous with clueless. We'll be a bit kinder and say flying by the seat of her drawers.

So far, Ms Yellen is doing a good job of it. Little by little she is acclimatising us to the prospect of a gradual turn in the US interest rate cycle. The markets this week reacted calmly to her hint that the Fed will drop the word 'patient' from its guidance at its next meeting in March. In other words, the Fed would no longer pledge to keep its policy rate at zero for at least the next two meetings. From now on its actions will be dictated wholly by the data. This keeps open the possibility of a tightening of monetary policy as early as June.

There's so much wrong with this pathetic little-kid-talk paragraph it's difficult to know where to start.

Guidance, the market needs guidance about something that's been rehashed in the news for months? The only folks who don't know about it are those who don't want to know about it.

Some might refer to them as the blessed.

"Actions wholly dictated by the data," what have they been doing all these months, playing a game a economic charades? These folks get paid some decent taxpayer-funded money to collect and decipher data. And yes, lo and behold, occasionally utter some straight forward sentences in straight-forward English.

But taking this stance is not the same as forecasting a definite rate rise. This is how it should be. Ms Yellen deserves credit for sharing a degree of humility about the precise strength of the US recovery. 

In this case, humility is to clueless as the sand is to the sea. Take a look at that "little by little" sentence. There's enough hedging in there to start a Wall Street fund.

If nothing else, this is a good example of what bureaucrats,  politicians and MSM think of the masses. Not much.