Federal Reserve Chair Janet Yellen will probably be quizzed about how President-elect Donald Trump’s fiscal policies might affect the economic outlook and path for rate increases when she gives congressional testimony Thursday. Don’t expect a clear answer.
The last sentence in that paragraph might be the first thing Bloomberg ever got correct. Yellen never gives clear answers. And there's good reason: She doesn't have any. And never has.
Bloomberg notes: While there’s growing confidence in a rate hike in December, Yellen may not be able to give the bicameral Joint Economic Committee in Washington many additional details on the more distant path for monetary policy. The future is loaded with more than the usual amount of hypotheticals that could alter the central bank’s economic forecasts and rate-hiking speed.
“She’ll continue to beat the drum as far as the Fed’s current outlook goes,” said Sam Bullard, managing director and senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “It’ll be interesting just to hear about the outlook given the political shift in landscape” but “I doubt seriously that they’re going to go too far out in making direct commentary on that until there’s greater clarity.”
The next time this Fed discovers greater clarity will be the first time. Seen any greater clarity ought to be the epitaph on Chair Yellen's Fed career. Wherever it's been it's a safe bet 2% inflation's hiding out there, too. Rumor has it they have economic interns and other underlings roaming the halls of the Eccles looking around corners and under tables for the missing twins, greater clarity and 2% inflation.
bloomberg.com/news/articles/2016-11-16/yellen-heads-to-congress-with-post-december-rate-outlook-in-flux
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