Janet Yellen Tells the Senate Banking Committee What She Thinks They Want to Hear
PS credit: WCV
In a written response to questions by Richard Shelby (R-AL), SF Fed President and soon-to-be Fed Vice Chair Janet Yellen gave predictably tame answers regarding the monetary policy outlook moving forward.
Of course, those of us familiar with Janet's work know that if she could get away with 4% inflation, she'd start pushing for 6. But when you are in a job interview and are asked "Tell me about one of your greatest weaknesses?" you of course answer "I tend to work TOO hard and not do enough for myself" instead of "Well I tend to drink too much and sometimes blow off work if I'm too hungover."
With me, kids?
“Supervision and regulation of financial institutions should provide the first line of defense against systemic risk, rather than monetary policy,” Yellen, 63, wrote. “The events of the past few years teach us that we need to closely monitor and analyze movements in leverage and asset prices and be cognizant of their effects in the conduct of monetary policy.”
She said that while a higher long-run inflation goal would “give the Fed more maneuvering room in the future,” she agrees with Bernanke that such a move “would be a risky policy strategy.” Most policy makers regard 2 percent as a level consistent with price stability.
Janet knows damn well 4% would get her fired.
Love ya, Janet, mean it!