Janet Yellen’s Fitting Finale: Fed Plans to Stand Still
- 6 years ago
Janet Yellen’s Fitting Finale: Fed Plans to Stand Still
“They said that policy was too gradual and predictable” during the last tightening cycle, said Mr. Reinhart, who played
a key role in the last round of rate increases when he was head of the Fed’s division of monetary affairs.
Chris Rupkey, chief financial economist at MUFG Union Bank in New York, said
that the persistence of low interest rates had been painful for banks and other financial firms, many of which also resented Ms. Yellen’s focus on strengthening financial regulation.
Mr. Powell, he said, “is going to be in a very different world: Fiscal stimulus when you’re already at full employment.”
Analysts and investors are unruffled by the impending departure of Ms. Yellen and installation of Mr. Powell.
“And now it is predictable and gradual and even slower.”
Under Ms. Yellen, the unemployment rate has declined to 4.1 percent from 6.7 percent
in February 2014, while inflation has remained below the Fed’s 2 percent target.
Scott Sumner, an economist at George Mason University, wrote in an October appraisal
that Ms. Yellen’s performance was “near perfection.” He added that, at the end of her tenure, Ms. Yellen will likely have achieved the Fed’s dual mandate of maximizing employment and stabilizing inflation “better than any other chair in history.”
There were plenty of critics along the way.
During the first three years of her tenure, in particular, Ms. Yellen repeatedly found reasons to argue
that the Fed should delay raising interest rates, extending the Fed’s stimulus campaign.
“They said that policy was too gradual and predictable” during the last tightening cycle, said Mr. Reinhart, who played
a key role in the last round of rate increases when he was head of the Fed’s division of monetary affairs.
Chris Rupkey, chief financial economist at MUFG Union Bank in New York, said
that the persistence of low interest rates had been painful for banks and other financial firms, many of which also resented Ms. Yellen’s focus on strengthening financial regulation.
Mr. Powell, he said, “is going to be in a very different world: Fiscal stimulus when you’re already at full employment.”
Analysts and investors are unruffled by the impending departure of Ms. Yellen and installation of Mr. Powell.
“And now it is predictable and gradual and even slower.”
Under Ms. Yellen, the unemployment rate has declined to 4.1 percent from 6.7 percent
in February 2014, while inflation has remained below the Fed’s 2 percent target.
Scott Sumner, an economist at George Mason University, wrote in an October appraisal
that Ms. Yellen’s performance was “near perfection.” He added that, at the end of her tenure, Ms. Yellen will likely have achieved the Fed’s dual mandate of maximizing employment and stabilizing inflation “better than any other chair in history.”
There were plenty of critics along the way.
During the first three years of her tenure, in particular, Ms. Yellen repeatedly found reasons to argue
that the Fed should delay raising interest rates, extending the Fed’s stimulus campaign.