It has been a while since we last heard from former Federal Reserve Chair Janet Yellen…
This week will be an interesting week in terms of monetary policy. The Federal Open Market Committee (FOMC) will convene and decide to either introduce a 25-basis-point cut to interest rates or leave it in the target range of 2.25 percent and 2.50 percent. Most of the market is anticipating a rate cut and possibly another one later this year.
If you woke up this morning wondering what Yellen thinks about the whole affair, here is what she told CNBC:
“I think in light of the risks, I would be inclined to cut a bit. I wouldn’t see this as the beginning, unless things change, of a major easing cycle. But I do think it’s appropriate.”
So, if Yellen endorses a rate cut, then you know it is bad news.
Everyone seems to be missing a major point in this discussion. If the United States economy were as strong as everyone states, then why would it not be able to endure present-day interest rates? Could it not handle three or four percent?
But President Donald Trump must be ecstatic. He has been urging the Eccles Building for a rate decline for months and now he finally gets it.
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