Comments will role
- When there is clarity about future economic policies FOMC will have to take account
- Fed could adjust depending upon policies
- economy is making good progress now
- it is up to Congress and administration to weigh costs and benefits of fiscal policy
- Advises that policymakers take into account economy near full employment
- Longer run deficit problem should be kept in mind
- Not a lot of fiscal space if there were a shock to the economy (given deficit)
- Would also advise keeping in mind impact of policies on productive capacity
EURUSD trades at new session lows. at 1.0673. The 10 year yield is at 2.254%. S&P is at 2180.28 (at 10:31 AM ET).
- Markets see inflationary consequences from fiscal expansion
- Seeing significant moves in long-term treasuries since election
- Fed will factor in assessment of new government policies in its policy actions
- Near-term risks are balanced; uncertainties will last for a considerable time
- Economy is safer and sounder as a result of Dodd Frank
- Would not want to see all improvements under Dodd Frank eliminated
The markets at 10:38 AM ET, are steady. The S&P is still at 2180. The 10 year is at 2.2510% - a touch higher. THe EURUSD is at 1.0670/ USDJPY is at 109.48 currently.
Yellen is not shocking the markets. The Q&A seems to be with regard to advise on how to approach fiscal policy and regulation as the focus shifts with the new administration. The Fed chair is painting a cautionary approach to each.
