Comments from Yellen in Chicago:
- Extraordinary commitment to stimulus will be needed for some time, a view widely shared by fellow policymakers
- Economy still ‘considerably short’ of Fed’s goals, will take time to reach
- Considerable slack remains in economy, labor market
- Cuts to bond buying a reflection of some labor market progress
- Points to part-time workers as evidence labor conditions worse than unemployment rate suggests
- Sees ‘considerable slack’ in economy and labor market
Yellen sounds more like her old dovish self in this speech, talking about supporting the economy rather than hiking rates. The US dollar is slumping on the headlines, down about 20 pips across the board. To me, the commentary is vague and the market is probably reading too much into it but that’s the way it goes with new Fed chairs.
There is no Q&A planned so the market will have a chance to digest.
