#FordSchoolYellen Q&A Post-Mortem - Janet Yellen's Greatest Hits

Fed Chair Janet Yellen has just completed her Q&A with Twitter. She did not disappoint...

The Economy...

  •  *YELLEN: U.S. ECONOMY IS "PRETTY HEALTHY"

Worst economic recovery on record...

 

  • *YELLEN: WE MUST SUSTAIN PROGRESS THAT WE HAVE ACHIEVED

Current Quarter GDP forecast 0.6%...

  • *YELLEN: APPROPRIATE TO GRADUALLY RAISE FED FUNDS RATE

If GDP forecasts for Q1 are correct, this will be the weakest economy since 1987 in which rates were increased. In fact this could be the lowest since Q4 1980 according to BBG data...

 

*YELLEN: FED WANTS TO AVOID BEING BEHIND THE CURVE ON RATES

And your term as Fed Chair has seen the lowest average economic growth ever... Barack Obama is the only president in US history to never have a year of economic growth over 3.0%...



Inflation

  • *YELLEN: ENERGY, DOLLAR, FOOD HAVE CAUSE GYRATIONS IN INFLATION

Perhaps 'cause' and 'effect' are confused here?

  • *YELLEN: FED DOESN'T WANT INFLATION LINGERING ABOVE, BELOW 2%

As decided by whom? Was this is the hidden 11th Commandment?

  • *YELLEN: MONEY DOESN'T CAUSE INFLATION INDEPENDENT OF ECONOMY

Don't tell Zimbabwe or Venezuela...

As @GreekFire22 tweeted so appropriately..."The fact that Yellen confused reserve creation with money creation was scary today. Everything else was a waste of time"

 

Lending

  • *YELLEN: LENDING HAS GROWN IN A HEALTHY WAY W/ ECONOMIC RECOVERY

But is crashing now...

 

Labor Market

  • *YELLEN SAYS U.S. LABOR MARKET IS NOW IN A NORMAL STATE

That must explain Trump's election, right?

  • *YELLEN: LACKLUSTER GDP GROWTH STUNNING GIVEN HIGH JOB GROWTH

Not if you pay attention to the collapse of the participation rate...

Employment to Pop

  • *YELLEN SAYS PRODUCTIVITY GROWTH IS LIKELY TO PICK UP

Any generation now...as we detailed previously, adjusting for the WWII anomaly (which tells us that GDP is not a good measure of a country’s prosperity) US productivity growth peaked in 1972 – incidentally the year after Nixon took the US off gold.

 

Fed Independence

  • *YELLEN: FED DESIGNED TO BE NONPARTISAN

Any time a Fed president, governor or chairman trots out the trite cliche that the Fed is "apolitical" we can't help but laugh for one simple reason: not only is the Fed not apolitical, but is very closely ideologically tied with whichever party promotes deficit spending which by definition is inflationary: more deficits mean more debt, means more opportunity for the Fed to show off its "inflation" creating skills; and in a Keynesian world, a stable 2% inflation is the lubricant that drives and stabilizes the financial system - the Fed's true mandate. There is a reason why central bankers call deflation a "monster" which must be slayed, as per Haruhiko "Peter Pan" Kuroda.

However, it is one thing to note the obvious, it is different to have proof that Fed members have a clear ideological bias. Thanks to recent Fed appointee Lael Brainard, we have just that.

According to Bloomberg, recent Treasury staffer and current Fed Governor Lael Brainard gave $1,950 to Hillary Clinton’s presidential campaign in February, Federal Election Commission records show

  • *FED'S YELLEN: OUR INDEPENDENCE IS UNDER SOME THREAT
  • *YELLEN: CENTRAL BANK POLICY INDEPENDENCE IS VERY IMPORTANT
  • *YELLEN: BILLS TO AUDIT FED, IMPOSE RULES THREATEN INDEPENDENCE

Because the public will discover more "Medley Global Advisers"?


Fed Policy

  • *YELLEN: FED UNDERSTANDS ITS MONETARY POLICY HAS INTL SPILLOVERS

Odd that you cared last year when China money markets were volatile but not so much now that Republicans are in office.

  • *YELLEN: RESEARCH SHOWS QE SUCCEEDED DRIVING DOWN LONG RATES

Actually rates rose during periods of QE, in fact interest rates have only declined in periods when the Fed stopped QE.

When one examines what has actually happened under QE, only stock prices have followed the QE theory.

 

  • *YELLEN: FED'S QE PROGRAMS HAD A FAVORABLE IMPACT ON ECONOMY

When you say "favorable" we think you are misunderstanding what that means...

 

So apart from all those lies - we are sure the audience were treated to some real knowledge-sharing.

And in conclusion...