What a difference 2 months make...
Fed's Yellen (12/17): "The decline we've seen in oil prices is likely to be, on net, a positive."
Fed's Yellen (02/18): "Persistently low oil prices could dampen the overall expansion of economic activity."
December 17th (via CNN Money):
The dramatic plunge in oil prices might be spooking some investors, but Janet Yellen isn't worried at all. The Federal Reserve chief believes oil tumbling below $55 a barrel is like a tax cut for American consumers.
"From the standpoint of the U.S. and U.S. outlook, the decline we've seen in oil prices is likely to be, on net, a positive," said Yellen at a press conference on Wednesday.
"It's good for families, for households. It's putting more money in their pockets," she said.
"On balance, I would see these developments as a positive," she said.
February 18th (via FOMC Minutes):
"Several participants noted that there were signs of layoffs in the oil and gas industries, and that persistently low energy prices might prompt a larger retrenchment of employment in these industries.
In addition, it was observed that if capital investment in energy-producing industries slowed significantly, it could damp the overall expansion of economic activity for a period, especially if the slowing took place after most of the positive effects of lower energy prices on growth in household spending had occurred."
And then you have this:
BoC Cote (02/19): "Low oil prices are unequivocally negative... have broad impact on economy... negative effects happen quickly."
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It appears he (and the latter Yellen) may be right?
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And this is the woman we trust to run the world?