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Janet Yellen’s Full Press Conference Transcript
Zero Hedge
Much has been said about Yellen’s less than stellar first press conference so we will let her own words do most of the talking. First, from the transcript of her prepared remarks and the following Q&A, here are some highlights.
First, the word count:
- Market(s): 35
- Economy: 25
- Weather: 7
- Inflation: 58
- Deflation: 1
The word cloud:
Goldman’s take of the press conference (as opposed to the statement which we summarized earlier):
BOTTOM LINE: Chair Yellen’s first post-meeting press conference came across as slightly more hawkish than expected.
MAIN POINTS:
1. When asked how to interpret the new guidance that the fed funds rate would remain in the current 0 to 25 basis point range for a “considerable time after the asset purchase program ends,” Chair Yellen stated that “the language in the statement … probably means something on the order of six months.” Assuming tapering continues at a pace of $10bn per meeting, this suggests rate hikes could begin as early as mid-2015.
2. Asked how to explain the hawkish shift in the “dots,” Yellen stated that “the labor market more broadly I think has improved a little more than we might have expected,” but went on to say that “I think that one should not look to the dot plot so to speak as the primary way in which the committee wants to or is speaking about policy to the public at large.”
3. Explaining the statement that the fed funds rate may remain at a below-normal level even as employment and inflation approach “mandate-consistent levels,” Yellen mainly appealed to persistent headwinds from the financial crisis, and did not explicitly mention optimal control considerations as she has in the past.
