Watch Live: Janet Yellen Testifies Why The Fed Is Once Again "Uncertain"

Update: So far little that was not in the prepared remarks. Here are the highlights from SMRA:

Reiterated that Fed "is very committed to achieve 2% objective", expect "over time" that will return toward objective, 12-month inflation rates likely "will remain low until" special factors have aged out, "premature to reach the judgment that we are not on the path" to return to objective, however, will be "watching very closely" the data and are "prepared to adjust" if needed. Policy not on a preset course.

Reduction of balance sheet expected to start "this year", "to my mind" the start could be "relatively soon", start of timing "does not matter a great deal".
FOMC has not discussed whether a rate hike and change to reinvestment policy could happen at same time.

On other topics:

  • FOMC intends over time to return to primarily Treasurys in its holdings
  • "To the best of my knowledge", no discussion about Fed buying student debt.
  • "I would be very concerned about subjecting the Fed to appropriations."
  • Yellen intends to serve out her term as Chair, has not given thought to renomination.
  • "I'm pleased to see a nomination" [of Randal Quarles] for Governor and Vice Chair of Supervision, "look forward" to his input on supervisory issues if confirmed.
  • "We try not to opine" on whether asset valuations are correct or not, as asset prices have moved up "have not seen a substantial increase in borrowing on those valuations", capital system is "strong" and "resilient".
  • Low participation rate an artifact of an aging population.

* * *

Fed Chair Janet Yellen surprised markets again, when after weeks of a hawkish setup, she suggested that the Fed is not only uncertain "about when - and how much - inflation will respond to tightening resource utilization”, but warning that the federal funds rate may "not have to rise all that much further to get to a neutral policy stance."

Even Goldman was surprised by the unexpected dovish relent:

"We read the paragraph about the neutral rate as slightly dovish for the longer-run outlook, particularly the comment “…the federal funds rate would not have to rise all that much further to get to a neutral policy stance.” Chair Yellen confirmed that she still expects the neutral rate to rise somewhat over time but remain below levels that prevailed in previous decades."

And now it is her turn to explain why, as Richard Breslow lamented earlier, Fed watchers will soon need VR goggles to understand the relentlessly growing confusion in Fed announcements and forecasts.

A reminder of testimony protocol per the WSJ: the chairman of the committee and the ranking member for the Democrats typically both read prepared statements. Sometimes a subcommittee chair will also speak. Then Ms. Yellen will read aloud the testimony that we've already dissected here on the blog. Only then will questions begin. So although the hearing starts soon, we're probably still 20 or 30 minutes away from anything new.

As a further reminder, today’s hearing will be the first time Ms. Yellen has testified since a major development in the financial regulatory debate, which has been swirling since President Donald Trump was elected and promised to “do a number” on the 2010 Dodd-Frank financial overhaul law. The Trump administration’s Treasury Department published a report in June with dozens of recommendations for re-examining or rolling back rules on the banking industry. That is squarely within the Fed's purview, and she could get a lot of questions about the recommendations.

Another topic that will likely be bring up today is the Trump administration's first nominee to the Fed’s governing board. Randal Quarles, an investment-fund manager and former Treasury official, is on tap to be vice chair of supervision. That pick was formally announced on Monday.

Finally, watch for discussions of whether Yellen plans to remain at the Fed after the expiration of her term, or whether she will voluntarily hand over the key to the Fed printer to Gary Cohn.

Watch live below:


Paul Kersey XAU XAG Wed, 07/12/2017 - 10:12 Permalink

So Trump favors putting the former President of Goldman Sachs, Gary Cohn, in as Federal Reserve Chairman. Goldmanite William Dudley is already the President of the New York Federal Reserve. Installing Cohn will be set and match for the Goldmanites. At least 300 million Americans will get even more royally fucked. The Goldmanites are running the table.

"President Donald Trump is increasingly unlikely to nominate Federal Reserve Chair Janet Yellen next year for a second term, four people close to the process said.

National Economic Council Director Gary Cohn is now the leading candidate to succeed Yellen as the world’s most important central banker, these people said."

In reply to by XAU XAG

All Risk No Reward EmmittFitzhume Wed, 07/12/2017 - 13:36 Permalink

You mean the 200,000 economically oppressed Jews who took the streets to protest their oppression at the hands of the Debt-Money Monopolist Mega-Corporate Fascist "Beast" Empire system?

Israel: 18 families control 60% corporate equity (2:00m in)

Israeli economy is ready to COLLAPSE, MASS PANIC IN ISRAEL

Israelis rally for better economic conditions

Israel mass protests over rising living costs | Aug 2011 | BBC News

Blaming all Jews for the actions of a few Debt-Money Monopolist controllers is to over generalize the problem and, therfore, PROTECT THE PROBLEM FROM BEING IDENTIFIED AND RESOLVED.

You irrational programmed Muppets are your own worst enemy.

In reply to by EmmittFitzhume

GUS100CORRINA knukles Wed, 07/12/2017 - 12:18 Permalink

Fed Chair Janet Yellen Warns Congress: US Debt Trajectory Is UnsustainableMy response: This message is 20+ years too late. As they say, THE COWS ARE ALREADY OUT OF THE BARN.Under"OBOZO" alone, America tacted on a COOL 10 Trillion Dollars of debt without even breaking a sweat!!!!! "BUSHWACK" wasn't much better.Over the last 28 years of presidents (BUSH I (4), CLINTON (8), BUSH II (8), OBAMA (8)), America must have been under the CURSE of GOD.  There is just NO OTHER EXPLANATION when one looks into just how much damage was done to the REPUBLIC.The DAMAGE may be irreversible as we are seeing with continued attacks on President TRUMP.

In reply to by knukles

atomic balm NoDebt Wed, 07/12/2017 - 12:59 Permalink

Have I mentioned again lately that we're turning into Japan?  I feel like it's been too long since I mentioned that point.Japanese Samurai: on origin of jews and evil of race mixingpart one two three four

In reply to by NoDebt

lil dirtball Caloot Wed, 07/12/2017 - 12:34 Permalink

> complete lack of.knowing what they are doing

You're kidding - right?

One cannot have a global government with a lone 'superpower'. The lone nail has been getting seriously banged down since the '80's. The d0llar, since 1913 - and they know full well what they're doing.

I mean, they post articles about it here on ZH all the time:…

In reply to by Caloot

SDShack lil dirtball Wed, 07/12/2017 - 13:14 Permalink

Yep, they know what they are doing. Yellen's words are a giant tell. She is essentially telling TPTB that if they don't get what they want from Trump and Congress, they have a plan to implode this sucker ala 2008, and blame will go to Trump and all the anti-establishment Repugs. Thus they can purge the nationalist uprising and install globalists to take their place to continue the march to their New Feudal World Order. Anyone could see the plan in 2016 before Trump secured the GOP nomination they way the entire establishment attacked him. There is no way the establishment will ever back down without a Barter Town style death match. Trump should have learned this during the campaign, and should have taken a flame thrower to Washington from Day 1. Refusing to do so is why the establishment is trying to eliminate him by death from a 1000 cuts now. If it doesn't work, they are essentially saying they have the nuclear option ready.

In reply to by lil dirtball

lasvegaspersona Caloot Wed, 07/12/2017 - 11:50 Permalink

The question is: Is this the beginning of full tilt towards hyperinflation?Every analyist except the absolute perma bulls have been saying we are/were headed for a downturn in the equity markets. Now we are to believe that the Fed finally saw this and decided to postpone that downturn. Since they were already worried about inflation....has the data changed?...Nope for sure. So what crazy thing are they doing?It looks to me like they are throwing in the towel.Hyperinflation is always preferred over deflation. People get fired in a deflation. Everyone makes billions and trillions and squadrillions in hyperinflation....until it all breaaks.

In reply to by Caloot

BullyBearish XAU XAG Wed, 07/12/2017 - 11:02 Permalink

the fed is the source of all evil in the U.S.:-provides "money" from thin air to buy corrupt politicians-provides "money" from thin air to fund the cia (clandestine israeli army) incursions globally-provides "money" from thin air to enable the U.S. to lead the world in murder, theft and terror-provides "money" from thin air to enslave its citizens while enriching themselves END THE FEDEND THE CIA READ: Legacy of Ashes: The History of the CIA

In reply to by XAU XAG

Chupacabra-322 BullyBearish Wed, 07/12/2017 - 15:08 Permalink

The CIA was formed in London formerly called the OSS which was a subsidiary of the British SIS (British Secret Intelligence Service) set up by the Bank of England during its formation.

There wasn't a single American involved in the formation of the OSS.

"The OSS was actually set up by four members of the British Chief of Staff: Lord Louis Mountbatten (formerly Battenberg), a cousin of the King, and related to the Frankfort banking families. Rothschild and Cassel; Charles Hambro, director of Special Operations Executive, and director of Hambros Bank; Col.Stewart Menzies, head of Secret Intelligence Service; and William Stephenson, in charge of SIS American operations."

~ page 140, World Order (Our Secret Rulers) written by American historian, author, and speaker Eustace Mullins.?

"The American secret service was never anything but a British operation.directed at all levels by representatives of the British Crown. OSS agents received advanced training for the European theater at Bletchley Park, British espionage headquarters. This site was chosen because it was only ten miles from Woburn Abbey, where Lord Beaverbrook' s agent, Sefton Delmer, operated the British "dirty tricks" center and other propaganda activities. Woburn Abbey was the ancestral home of the Duke of Bedford, Marquess of Tavistock. The British Bureau of Psychological, Warfare operated as the Tavistock Institute. "

- page 141, World Order (Our Secret Rulers) written by American historian, author, and speaker Eustace Mullins.

In reply to by BullyBearish

John Law Lives Wed, 07/12/2017 - 10:10 Permalink

Many incumbents in Congress seem just fine with dovish policy keeping the game going a bit longer.  People are less likely to "throw the bums out" when asset values are rising.  Many of those maggots just want to keep their positions of power as long as they can.Fed_FUBAR_to_Hell