Janet Yellen’s testimony before Congress last week provided support for a range of views about Fed policy. The Wall Street Journal’s coverage reflected a view that a Fed rate hike in June was still on the table. In contrast, The New York Times reflected a perspective indicating the first increase in interest rates was still some time off.
To those who believe the FOMC will begin to raise rates in June, Chair Yellen would have seemed upbeat about labor markets and job growth. To those who believe a rate hike is not imminent, Yellen validated their perspective by acknowledging inflation has been running below the Fed’s 2% target-goal for more than two years and may be headed further from that goal in the next few months.
What should investors think of the mixed message? “It accurately reflects the cross-currents in the macro landscape today,” says Shehriyar Antia, a new contributor to A4A and former senior analyst at the Federal Reserve Bank of New York. “Moreover, Yellen’s aim was to reflect the diversity of views on the FOMC and, as always, not to make waves.”
That’s the kind of insight Shehriyar Antia will be providing to financial advice professionals on A4A in his monthly blog posts and quarterly webinars, which began with this session.
“If you were looking for a signal of an impending policy action three weeks ahead of an FOMC meeting, you were disappointed,” says Antia. “But a Fed Chair is unlikely to provide the market ‘new information’ outside of an FOMC meeting.”
Antia says the market’s obsession with the timing of the initial rate hike distracts from two other aspects of FOMC rate policy that will impact the yield curve for years to come. He will be discussing this at his webinar at 4 p.m. today, entitled What Will Drive Yields In 2015.
An Amazing Improvement In The World Situation
When Antia left the Fed to start a career as an independent strategist and portfolio manager, he could have written for major financial magazines in the traditional media. He chose A4A. With thought leaders like Fritz Meyer, Robert Keebler, Craig Israelsen, Robert Clark, and many irregular contributors to our webinar series, we’re providing through leadership for a community of financial professionals.
The fact that Mr. Antia could have worked with anyone but chose A4A demonstrates how the Web is connecting people to do collaborate around the world every second of the day, unleashing torrent of information that can be consumed on demand abnd sperad knowledge organically through social networking.
Shehriyar, a New York boy, like me, received a masters degree from Columbia University's Graduate School of International and Public Affairs, and that's how he stumbled into me on the Web. The power to connect like-minded people with common goals to do good work makes me optimistic about the future of civilization and our nation. Internet innovation comes from mostly from the U.S. and the explosion of intelligent information, creativity, and advanced knowledge and training we're witnessing become available 24/7 will be remembered as a watershed event in the human timeline over the next five or 10 millennia.