Startled Reporter Asks Why Yellen Hiked With GDP And Real Wages Sliding: Here Is The Response

Tyler Durden's picture


Today's FOMC press conference was the standard affair. Reporters ask broad questions, Yellen responds with even broader comments that amble aimlessly leaving no one any wiser as to The Fed's true intent. That is, until Bloomberg TV's Kathleen Hays decided enough was enough, and wanted to get to the bottom of just why a "data-dependent" Fed is hiking in a world in which economic data is rapidly deteriorating.

The bespectacled Hays dared to suggest some 'facts' and real news - as opposed to Yellen's 'forecasts' - in an effort to comprehend what changed in March to turn a ubiquitously dovish Fed into a seemingly panic-stricken pack of hawks...

I'm going to try to take the opposite side of this, because -- and this question about market expectations, and how the market's got things wrong, and then how you say the Fed suddenly clarified what it already said. But for example, if the -- if you look at the Atlanta Fed's latest GDP tracker for the first quarter, it's down to 0.9 percent. We had a retail sales report that was mixed. We had the, you know, the upper divisions of previous months make it look better. But the consumer does not appear to be roaring in the first quarter, kind of underscoring the wait-and-see attitude you just mentioned.



If you look at measured of labor compensation, you note in the statement that they're not moving up. And in fact, they are -- and if you look at average out, there are so many things you can look at. And you yourself have said in the past that the fact that that is happening is perhaps an indication there's still slack in the labor market.



I guess my question is this: In another sense, what happened between December and March?




GDP is tracking very low. Measures of labor compensation are not threatening to boost inflation any time fast. The consumer is not picking up very much. Fiscal policy, we don't know what's going to happen with Donald Trump. And yet, you have to raise rates now. So what is the -- what is the motivation here? The economy is so far from your forecast in terms of GDP, why does the Fed have to move now? What does this signal, then, about the rest of the year?

Yellen frowned awkwardly and began...

So GDP is a pretty noisy indicator.

... And then she added.

If one averages through several quarters, I would describe our economy as one that has been growing around two percent per year. And as you can see from our projections, we -- that's something we expect to continue over the next couple of years.


Now, that pace of growth has been consistent with a pace of job creation that is more rapid than what is sustainable if labor force participation begins to move down, in line with what we see as its longer-run trend with an aging population.


Now, unemployment hasn't moved that much, in part because people have been drawn into the labor force. Labor force participation, as I mentioned in my remarks, has been about flat over the last three years. So in that sense, the economy has shown over the last several years that it may have had more room to run than some people might have estimated, and that's been -- that's been good. It's meant we've had a great deal of job -- job creation over these years.


And there could be -- there could be room left for that to play out further. In fact, look, policy remains accommodative. We expect further improvement in the labor market. We expect the unemployment rate to move down further and to stay down for the next several years. So we do expect that the path of policy we think is appropriate is one that is going to lead to some further strengthening in the labor market.

So not one comment on the actual data points that Hays refers to. Merely the standard - resort to 'something about employment' comment - and end on a reassuring tone of accomodation remains. But Hays was not done and unlike the rest of the room would not take Yellen's wishy-washy bullshit response as writ...

Just quickly then, I just want to underscore -- I want to ask you, so following on that, you expect it to move. But what if it doesn't? What if GDP doesn't pick up? What if you don't see wage measures rising? What if you don't -- what if the (inaudible) gets stuck at 1.7 percent?


Would you -- is it your view perhaps that if there's a risk right now in the median forecast for dots (ph), that it's fewer hikes this year rather than the consensus or more?

To which an anxious Yellen replied - notably eyeballing off camera to someone - clearly upset at being cornered on some facts...

Well, look, our policy is not set in stone. It is data- dependent and we're -- we're not locked into any particular policy path. Our -- you know, as you said, the data have not notably strengthened. I -- there's noise always in the data from quarter to quarter. But we haven't changed our view of the outlook. We think we're on the same path, not -- we haven't boosted the outlook, projected faster growth. We think we're moving along the same course we've been on, but it is one that involves gradual tightening in the labor market.


I would describe some measures of wage growth as having moved up some. Some measures haven't moved up, but there's  is also suggestive of a strengthening labor market. And we expect policy to remain accommodative now for some time. So we're talking about a gradual path of removing policy accommodation as the economy makes progress moving toward neutral. But we're continuing to provide accommodation to the economy that's allowing it to grow at an above-trend pace that's consistent with further improvement in the labor market.

So when faced with factual data points such as real wage declines, collapsing GDP growth expectations, disappointing retail sales, and uncertain fiscal policy, the chair of The Federal Reserve defends the decision to hike rates for the 3rd time in 11 years by saying that "data is noisy", that The Fed's forecast for growth remains positive, and that The Fed remains accomodative.

For now it appears what matters to The Fed is not 'hard' real economic data but 'soft' survey and confidence data...


As a reminder this may be the weakest quarter of economic growth for a rate hike since 1980!!


Sadly, we suspect Ms. Hays future question-asking privileges may well go the way of The Wall Street Journal's Pedro Da Costa.

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whosyerdaddy's picture


Looney's picture


Mr. Yellen, get busy, go eat some Gefilte Shit.

Looney  ;-)

knukles's picture

"Because we don't know what the fuck we're doing. OK?"

Osmium's picture

I can't believe Yellen didn't reply  "Because I have a fkn printing press, I can do what I want"

ParkAveFlasher's picture

Yellen replied, "Cuz me an' my brudder have to buy mawr oatmeal, dats whuy."

Ghost of Porky's picture

You know what else is a noisy indicator, Janet? A WOODCHIPPER, THATS WHAT!!!

RAT005's picture

Are people suggesting the off-script moment explains Bizzarro World today?  No complaints, bought just enough phys last week.

xythras's picture
xythras (not verified) RAT005 Mar 15, 2017 4:47 PM

The peasants are starting to ask questions. Not Good.

But on another note, at least some GOP peasants are curious about Soros medling in other countries' shit.

Closing in on George Soros: Senators ask Tillerson to Probe US “Fomenting Unrest” in Other Countries


8774_44887's picture
8774_44887 (not verified) xythras Mar 15, 2017 4:54 PM

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do...

kavlar's picture
kavlar (not verified) bamawatson Mar 15, 2017 6:29 PM

The entire US Government is full of cowards who can't get rid of the privately owned Fed.

techies-r-us's picture
techies-r-us (not verified) kavlar Mar 15, 2017 6:30 PM

The bribes are too jewcy.

TeethVillage88s's picture

I've got a headache. I need a drink. (FDIC Failures) (RTC Failures thou terminated data didn't propagate) (all institution failures) (total Banks) ($31 Trillion foreign compared to $26 for US) (This is very interesting as Big Banks are growing strongly, but the number of total us banks is dramatically decreasing, like someone is gaming the system, Commercial Banks in the U.S. - FRED - St. Louis Fed)

Investment Foreign Investment Domestic Investment

Money (Up to Date, but looks like Crap, eh?) (M1 seems to increase with Mortgages) (M2 seems to show different bubble perhaps) (MZM seems to show peak in Economy 1981) (Total Debt) (Total Debt as percent of GDP) (corporate profits, 1-1-2014)

Total US Debt ($64 Trillion I guess) (Total Federal Debt) (Total Debt as percent of GDP) (Gini Coefficient) (CIVILIAN PARTICIPATION RATE) (Not in Labor Force) (Employees: Manufacturing 12.1 M Persons)

All Federal Reserve Banks - Total Assets, Eliminations from Consolidation
2014-10-22: 4,481,616 Millions of Dollars (+ see more)
Weekly, As of Wednesday, Not Seasonally Adjusted, WALCL, Updated: 2014-10-23

ffed's picture

Forget about all the .  The earth is FLAT and somebody got us to believe we can stick to a ball!

fleur de lis's picture

McCain and Yellen should get a room together.

They are both incompetent, geriatric deadweights on us.

They have no brains but hold positions of influence because they are connected to the right parasites.

But their incompetence is not the worst -- it's that they are sociopathic dunces who are knowingly beholden to parasites whose only goal is looting the system and destroying America and they don't care.

They both have Merkel syndrome -- do whatever you like now and who cares if it destroys everything in the future -- they will all be gone and will not have to pay the price.

They are all white trash no matter how much money or power they have.



limpinalien69's picture

These crafty muzzies can't be trusted. They control Hollywood, porn industry, wall street, politicians, wall street.... nothing good can ever come from muzzies cos are good joo friends said so.

Street Smart's picture

Another anti-Semite spreading lies and hate.

logicalman's picture

Eric Holder is a cawardly piece of shit.

GUS100CORRINA's picture

One word as to why FED is raising rates: STAGFLATION

I now believe the CBs have lost control and we are going to see real panic in the time period ahead.

A decade of DEBT has CREATED a situation that will be very difficult to manage.


fleur de lis's picture

1) Whose idea was it to put that parasitic moron Yellen in charge.

2) Trump's team needs to find a replacement and put Yellen out to pasture.

3) The Fed needs to be audited and closed. 

4) We need to find out where they stashed all our money, clean out their bankbooks, and return it to the Treasury.

5) The Fed's parasitic employees should be barred from any goverment or bank job like anyone else caught in money scams.

The Federal Parasite Resever has brought nothing but wreck and ruin at home and abroad since the day in 1913 when in was hatched for no other purposes but fraud, theft, misappropriation, wars, looting, and bloodshed. 

It has not one good reason to exist and its accursed employees are nothing short of traitors.



c0nan's picture

And a racist. And an enemy to civilized society. And he knows the truth, there is no space:

Stuck on Zero's picture

What Yellen was thinking: "You ignorant bunch of middle class savages ... the rich are taking all the spoils with my blessings. Now FO."

silverserfer's picture

you can make 7k a month spamming comment sections on the internet? What?!


Well, well, well. 

Both of Zero Hedges biggest pimps, complete with links.

Too bad you couldn't attract the Shitwave dickhead over here to make it a pimp trifecta.

Go stagger through an airport snowblower, with the output chute directed at a roaring fire.


Lore's picture

It sure would be nice to see clickbaiters get banned just once in a while.  

espirit's picture

Not sure what anyone expects to be accomplished when a Kleptocracy gives you binary choices to choose from.

Red Crime Cartel...


Blue Crime Cartel...


Choose Your Color Carefully.

Giant Meteor's picture

Whois & Quick Stats

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Postal Code:78754






Contact Mr. McDonald with the domain forbesjobsreport name AND affiliate ID bo0517 with your best wishes etc ..

He'll boot the fucker, he don't want the bad press .. I'm fairly certain ..

End Transmission ..

unnamed enemy's picture

i don't think Mr. McDonald, give 2 shits about what we think, as long as the invoices get paid.



Giant Meteor's picture

Possible, but in matters such as these, I've always found the squeaky wheel gets the grease. Also, as you may know, there are other ways ... This is the last time I post this shit, but I do have it saved. I haven't made it a personal mission yet, but I enjoy fucking with these assholes, a great deal! I probably should get a hobby ..

Upvote btw ..

Thanks for weighing in ...

exi1ed0ne's picture

Oh god, blog pimp bot and money spam bot are in cahoots.  I think the bots are becoming self aware.  Better make sure you get that phased plasma rifle in the 40 watt range.  Convergence is here!

AldousHuxley's picture

Because FED is behind the curve

Should have raised last year, but wanted to help Clintons win.

Now that Trump is in charge and will be replacing Yellen in 2018, Janet is raising them while she can. Trump is going to either hyperinflate...good for debtors and real estate, OR deflate to buy up properties at firesale prices he missed in 2009. Depends on his how his son-in-law has bet.


Kashikari of Goldman Sachs bailout fame voted to NOT raise so his  Goldman buddies keep getting million dollar bonuses for God's work.

TeethVillage88s's picture

Neel Kashkari has proved this day to be Political.

He doesn't remember to be Honest, have Integrity, demand True Business Systems and True Profits without all the Subsidies Tricks, M&A Arbitrage, Sucking up Resources of smaller or older Businesses, Non GAAP Accounting Tricks, and Tax Credits.

Neel Kashkari... at long last have you no shame, have you NO SHAME AT ALL.?

curbjob's picture

What's missing here is "is ZH, after 8 years of ZIRP and NIRP bashing, suggesting that the Fed NOT raise rates ! ?"


Is ZH editorial suggesting that Trump can only grow the economy by  the Fed keeping interest rates essentially at 0% .. seriously  ?

So Kyle Bass is wrong on Japan  ? It isn't the fucking endless QE, right ? What they're missing is a Trump ?

Fuck you Tyler you fucking fascist cunt. I can actually taste the blood as I pull your fucking teeth out of my forehead. 

TuPhat's picture

I've been thinking along those lines myself.  ZH has lost something and as a result I don't read it as often as I used to.  Where can I turn for 'real' news?

Mr T's picture

TuPhat real news is found with wisdom and discernment. However if you mean the numerous self promoters, I agree. It is an example of a type of psychosis that we see throughout society or what passes as same. Do not let perfect be the enemy of the good. 

Oh by the way I believe Zerohedge promotes Honest money, and liberty in this swamp , not a bad foundation in this swamp



Chris88's picture

They decided to hop on the leftist Donny bandwagon and will twist the narrative accordingly.  Why do you think we have such a massive influx of dumb hicks here the past 6 months?  

TheReplacement's picture

I don't think it is that.  I think it is,

'Hey, you told us the Fed is an independent thingymajiggy and not into partisan politics.  If so, how come they held rates at zero when the (cooked books) numbers looked better and now that the numbers are looking more garbagy the rate is going up?  What's the deal?'

They are pointing out that when the Kenyan was eating pizza and hotdogs in the bowels of the Whitehouse the Fed graced him with a politically beneficial policy.

They are pointing out that now that Captain Carrot is in charge they are going to effectively force him to spit into the wind.

Independent... yeah.

LibertarianMenace's picture

Astute analysis of a subtle argument. But that's not something posers and other assorted fakers can understand.

StychoKiller's picture

Meh, raising rates now is just Political Eyewash, why not see just how much rates rise, if at all.  (Meanwhile, the printing presses are STILL humming along!)

xythras's picture
xythras (not verified) Ghost of Porky Mar 15, 2017 4:47 PM


Croesus's picture

Boy, that reminded me of Lewis Black's "Center of the Universe" routine...."A spam Post...directly replied to....BY ANOTHER SPAM POST".

Good job, Ciprian

Adullam's picture

Who knows ... spammer usually have more than one account so @xythras is probably just responding to himself ... after he upvotes his own spam of course.

Oliver Klozoff's picture

Tillerson looks like a bulldog to me. Glad he's there.

The Flynn debacle had left me wondering if Donald had put too much trust in the wrong people as recent articles may suggest. Flynn truly may have been loyal to Trump in deceiving Pence.

I wonder what Trump will do about the centrally planned moneyhole the autonomous vehicle industry is proving to be. ubberr and luft will never make a penny.

LibertarianMenace's picture

If our money were real, the autonomous vehicle 'industry' and other tech bubbly couldn't be.

PresidentCamacho's picture

Keep your wood chippers well lubricated and serviced for the times ahead.

eatthebanksters's picture

She is trying her Dan rest to keep the bubbles from growing...