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QEeen Yellen's Testimony Preview
It would appear that much of the rally yesterday (and early overnight) was driven by hope (and confirmed relief) that Fed chair nominee Yellen is not about to take on a substantially less-dovish tone in today’s testimony in an effort to garner the support of the more hawkish elements of the Senate Banking Committee. There was a great deal of confirmation bias in the market's move and interpretation but, as BofAML notes below, this may be misplaced. The more important part of today’s testimony is yet to come in the Q&A session - where we will hear likely more unscripted thoughts from the QEeen at her Senate confirmation this morning.
Deutsche's Jim Reid notes that:
The market has zeroed in on the 5th and 6th paragraphs of the statement where Yellen describes the economy as performing “far short” of its potential. She goes on to say that inflation has been running below target and that unemployment is still too high. As such, Yellen concludes that the Fed will continue to use monetary policy tools to promote a more robust recovery.
On the question of QE, Yellen says that a strong recovery will enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools. She adds that supporting the recovery is the "surest path to returning to a more normal" approach to monetary policy.
So while the tones are certainly dovish, it’s impossible to infer precise policy thoughts from her remarks. She clearly views that the economy has not yet reached a strong enough trajectory but is she making a grander point that they won't start tapering until the data is better than now?
Or does tapering to $70bn, $50bn, $30bn etc a month still represent supporting the recovery. Indeed, it’s difficult to infer anything concrete regarding the path of monetary policy from Yellen’s prepared comments.
So while dovish, he implies that perhaps the market is experiencing a little to much confirmation bias.
BofAML also notes that markets read her comments as dovish, inferring that she might wait some time to taper Fed asset purchases... but disagree with that interpretation.
Markets see prepared statement as dovish
Janet Yellen, the current vice chair of the Federal Reserve and nominee to replace Ben Bernanke as Fed chair, released a brief prepared statement (see full report for footnote) Wednesday afternoon, ahead of the Senate Banking Committee hearing that begins at 10 AM ET on Thursday, November 14. Markets read it as dovish, particularly as many commentators expected her to retreat to a "balanced" (i.e., more hawkish) position. We view her comments as supporting continued Fed accommodation, consistent with ongoing official FOMC statements but not revealing any specific policy plans. Overall we expect continuity in Fed policy following her confirmation.
Support for dual mandate and inflation target
No surprise, Yellen's text confirms she strongly supports the Fed's dual mandate. She acknowledges progress in the recovery (to push back against the inevitable suggestion on Thursday that Fed easing has been ineffective), but notes unemployment is "still too high" while inflation may remain below the Fed's 2% goal for some time. Hence, she concludes, the Fed "has more work to do." To front-run questions that presume she will be too soft on inflation, Yellen notes that she "led the effort to adopt ... a 2% goal for inflation." This, she argues, sends a "clear and powerful message" that "has helped anchor the public's expectations" for "low and stable" inflation. Expect her to repeat this argument multiple times on Thursday.
The taper question, ultimately
Yellen states that "supporting the recovery today is the surest path to a more normal approach to monetary policy" - in other words, policy needs to remain easy now to tighten later. Additionally, "a strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases." Early commentary focused on the word "ultimately" as a possible signal that Yellen does not plan to taper for a while.
But "reduce its monetary accommodation" typically has meant rate hikes in official Fed communication, while reducing "reliance on unconventional tools" likely refers to the eventual reduction in the size of the Fed's balance sheet rather than tapering. Recall, most Fed officials take a "stock approach" to QE; in that view it's the total amount of assets owned and not the purchase pace that defines the degree of accommodation. No doubt she'll get questions about the Fed's tapering plans on Thursday.
On financial stability
Yellen further pledges to continue to support Fed efforts to address financial stability concerns. She emphasizes supervisory and regulatory tools "to reduce the threat of another financial crisis," but notes that the Fed also is taking financial stability "into consideration when carrying out its responsibilities for monetary policy." This suggests she may be open to tightening policy to address bubble concerns. Look for her to be questioned on whether there are bubbles now (expected answer: no, or at least not systemic) and how the Fed should respond to such risks.
One thing appears clear - QEeen Yellen will bring continuity to Fed policy once she is confirmed... but a taper may still be on the table.
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C'mon Tylers, you don't call a QEeen by her "surname". HM QEeen Janet, please.
Will they be showing his baby pics and playing his theme song?
http://www.youtube.com/watch?v=rDEQY4Qliag
DOW 36K
i cant wait till she gives them the 2 finger poke to the eyes, followed by the nose grab hand hit..than a few yucnk yucnk yucnk...
Another "East German" Banker takes the reigns...
this QEeen has not worked a single fucking day of her life in the private sector.
Why do you hate kind, little old ladies...............?
Congrats on your appointment miss yellen.
We would be gratefull if you could reply yes or no in the Q&A
Is the fractional reserve banking serving the people well? errrrrrrrrrrrr No
Could the country function without the FED as it did for many years errrrrrrrrrrrrrrr Yes
Finally is it your intention to buy back all outstanding bonds as well as any new ones........................errrrrrrrrrrrrr mmmmmmmmmmmmm yes!
That all from me now get back to the presses!
Would you prefer boiled cotton or boiled hemp?
pods
liar liar bitchez
Janet Yellens dance party.............
http://www.youtube.com/watch?v=TyACwczjGTs
When did we start considering wealth destruction, continued malinvestment, and free funding for police states "dovish"?
Honest question..
Honest answer: We never did. They just make this shit up as they go along. It's lunacy until until someone says it or prints it - then it's mainstream.
Good one, QEeen Yellen kinda like the wefare qeeen.
Lining her bankster member's pockets.
Her 12 member Fed PhD stooges will be bringing more finaincial drugs into the asset party.
Economic-fellon Yellen quellin fear of QE having fellin. MOAR!
a 69 year old fat cow? seriously, the US has no one better for the job? its not that she's "dovish", its that its obvious she has no self restraint. get her at a buffet and clear the fucking room....
It sounds to me like she adequately represents her target audience.
I think you've answered your own question.
No one better???? She's a pedigreed idiot, thus it's impossible for intelligent people, or commoners to argue with her.
Her real test is her ability to lie her ass off without the Bernanke lip-quiver. (as that was his only real failure)
Perception is important. Many are starting to believe their "lying eyes" regarding the state of the real wealth transfer (to the 1%) and the oligarchy, but how can anyone believe that this grandmother is really the front man for an evil empire? Just look at her, she is making you cookies, how could you put her to the guillotine?
The wealth transfer continues. The middle class will soon be dead or desparate. The few families behind the scheme know that war and a culling of the herd is necessary. They will get their way, they always have...
hedge accordingly.
Yellen - the Dark Side's (lesbian) Yoda
The one bad thing he-she has going is some ingormanus TSA agent will strip-cavity search grandmama someday
@101 years and c
All fed head should be fat cows .................FAT Cash Cows!
your charter is about up, why should the congress renew it?? ( a question I am sure will not be asked)
"I have Mortgage Fraud, Market Manipulation, Credit Card Abuse, Libor Rigging and Predatory Lending AM I DIVERSIFIED? #AskJPM"
It's still funny.
Why bother with this senate charrade? Shes in like crooks in D.C...
If you think the sycophants in the MSM had been covering up for Zero prepare yourself for what we will witness with this bitch. I don't care what she does, they will shield her from any criticism whatsoever. And if this thing does finally collapse, rest assured that TPTB will give her plenty of cover.
She is going to boost QE. I'm guessing in a couple months she'll come out and say if we just DOUBLED the QE for a few months it might completely pull us out of this rut.
When I see an old woman in charge of the world that is when I have to say Fuck the Queen. BTFATBH.
Last price:$441.98995
Taper? I'll believe it when I see it.
Talk is cheap. Watch what they do, not what they say.
Gold will likely be smashed today to show what a good job the Fed is doing. Yellen will print $100b by March.
Gold will likely be smashed today- I hope so! I like buying it on sale.
ditto - love it when dumfucktards sell me theirs at a nice discount
Lowered expectations:
QE will end and be reversed
QE will end
QE will taper <--- YOU ARE HERE
QE won’t get any bigger
QE will increase at a constant rate
QE will increase as needed
QE is currently ~3x the number fit for sheeple consumption
Another ruling class cunt
someone fuck with her meds , one look at her and you see classic type 2 dm, CAD, and chronic fungal infections, she will have a massive CVA when she wakes up at 3am and her sub concious confronts her with the evil of her ilk.
No stopping the QEeen. If doubling QE doesn't work she'll double it again.
The Fed will go from owning 30% of the US debt to owning all of it with a Ponzi money system.
when that happens, shut down the government and default on the debt.
guten tag
alles super gut
At least Bernanke had a beard so I didn't have to look at his ugly cranium while he was lying his ass off!
Where's the delete button?
A couple of juicy 'hints' that much more free smack is coming and we've got +200 on the DOW sow easily today.
Who gives a shit about Mr Yellen- I'm massively disappointed the AskJPM was canceled.
Yellen
n, lesbian Yoda
Looks like a female Yoda - hence "Y"ellen - probably gay too - hence Y"ellen"
There will be no taper. Why is this still seen as a possibility. Sure they may talk it, but it won't happen.
Yet gold will get it's arse kicked.
Mark 5:25-34
And there was a woman who had had a venereal discharge for twelve years.
@Beau Tox
Long on pampers then?
Toilet Paper Futures
anyone wonder if her last name was derived to her reaction up waking and looking in the mirror?
I remember the quaint days of yore when price stability meant money retained it's value and a low unemployment rate meant more people had jobs.