SF Fed's Yellen is Ready When the Board of Governors Is
Though San Francisco Fed President Janet Yellen's nomination as Fed Vice Chair is not official, it may as well be.
"I have not been nominated for the job but I been contacted by the White House and am in the process of providing the information that they have requested," Yellen told reporters after a speech in Los Angeles. "I am certainly providing the information requested and would be open to serving if and when I am asked to do so."
Yellen also knows she's got a reputation to defend and/or rebrand. Not all Fedwatchers got as bent out of shape as yours truly at the news (in fact, one ex-Fed official told JDA that he was completely OK with Janet as Fed Vice Chair and invited the "balance" her views would provide at the Board) but she's going to have to do better than the following if she expects to appease her most vicious critics.
"My forecast is that moderate growth will continue, inflation will remain subdued, and unemployment will inch down," Ms. Yellen said.
The economy should "gradually" speed up, with growth in the current quarter ranging between 2.5% to 3%, she added. She expected economic growth of around 3.5% in 2010 and 4.5% in 2011.
Ms. Yellen is very focused on the large amount of slack in the economy, which economists often refer to as an "output gap."
"I don't expect the output gap to completely disappear until sometime in 2013," she said. "If the economy continues to operate below its potential, then core inflation could move lower this year and next," she said.
Janet might fare better if she sticks to what she knows and doesn't worry about the rabid financial media tearing her a new asshole every time she opens her mouth. Just sayin.