My educated interpretation of what Janet Yellen told the Senate Banking Committee on Tuesday boils down to this: The Fed is going to raise interest rates when it is going to raise rates and not one day earlier.
In other words, I don't have any idea, and it's likely she doesn't either. But it's probably not likely to happen in the immediate future, maybe not even this year.
Whether that's a mistake or not is a different matter (I think it is). But it was clear – or rather unclear – that the Fed has no intention of doing anything about raising short-term rates above near-zero anytime soon.
Analysts and pontificators, of course, did their best to put their own spin on what she said (kind of like what I'm doing now). In typical Fed Chair-speak, Yellen provided a bunch of "we might do this – but then again we might not" comments that could mean just about anything. Continue reading "So What Did Yellen Actually Say?"