The Great Debate UK

from Nicholas Wapshott:

Yellen shows her hand

The difference between the Federal Reserve Board of Chairwoman Janet Yellen and that of her immediate predecessor Ben Bernanke is becoming clear. No more so than in their approach to the problem of joblessness.

Bernanke made clear that in the post-2008 economy, his principal goal was the creation of jobs, not curbing inflation. He settled on a figure, 6.5 percent unemployment, as the threshold that would guide his actions.

While remaining true to the spirit of Bernanke’s principal goal, Yellen and the rest of her board refined the target in their meeting on March 18 and 19, a change in approach that at first sent the wrong signal to the stock and bond markets. At the press conference following the meeting, Yellen said she would not be raising interest rates “for a considerable time,” which could mean “something on the order of around six months.”

The Fed decided it would no longer be tied to the “quantitative” 6.5 percent jobless figure, which is fast being approached. The February unemployment numbers, for example, are 6.7 percent. After listening to Yellen, the markets assumed -- wrongly -- that the Fed was about to abandon the jobless target, end quantitative easing and start raising interest rates.

from The Great Debate:

The politics of Syria

Congressional Democrats are in a bind. If they vote to authorize a military strike on Syria, they could be putting the country on a slippery slope to war. But if they vote no, they will deliver a crushing defeat to their president.

What President Barack Obama did was call their bluff. Last week, more than 50 House Democrats signed a letter urging the president to “seek an affirmative decision of Congress” before committing to any military engagement. That was the Democrats' way of going on record to express reservations about what Obama sounded like he was going to do anyway. Then, lo and behold, the president decided to do exactly what they asked. Now it's their decision.

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