Today, Janet Yellen appeared before the Senate Banking Committee to give her semi-annual monetary policy report to Congress. Her basic message, laid out in a prepared statement, hasn’t changed: the economy is slowly improving, but certain measures of the labor market still worry her. Since her last report to Congress in February,“important progress has been made in restoring the economy to health and in strengthening the financial system. Yet too many Americans remain unemployed, inflation remains below our longer-run objective, and not all of the necessary financial reform initiatives have been completed.”
Today at the IMF, Janet Yellen gave a speech on financial stability. More specifically, she talked about monetary policy’s shortcomings as a tool for financial stability. Neil Irwin calls it “the most significant speech yet in her still-young Federal Reserve chairmanship.”
from Data Dive:
Reuters has a story out this week delving into Fed chair Janet Yellen’s views about employment. Yellen wants to see more wage growth before she really believes the employment situation is improving, as “research from the Fed's staff and her own past academic work both suggest there may be more slack in the economy than inflation hawks believe,” according to the Reuters piece.
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The Fed’s Open Market Committee concluded its two-day June meeting yesterday with a moderately positive note: economic activity has rebounded from the terrible first quarter and labor market conditions seem to be improving, according to the statement. That said, because of said terrible first quarter, the outlook for U.S. economic growth is lower than it was at the last policy meeting in April: the Fed now expects the economy to grow 2.1-2.3%, compared to 2.8-3% previously.
(The author is a Reuters editor. The views expressed are his own.)
These aren’t the words anyone really wants to hear, but some of the favored momentum greats of the current era, ones that Jim Cramer called the Four Horsemen of Who Cares What the Price Is, are starting to crack a little bit.