Yellen: “We will keep plodding”

In her opening remarks at Jackson Hole:

…my primary message today is that I expect monetary policy will continue to play a vital part in promoting a stable and healthy economy. New policy tools, which helped the Federal Reserve respond to the financial crisis and Great Recession, are likely to remain useful in dealing with future downturns. Additional tools may be needed and will be the subject of research and debate. But even if average interest rates remain lower than in the past, I believe that monetary policy will, under most conditions, be able to respond effectively.

Unfortunately, that is not happening. As illustrated in the charts, monetary policy has been overly tight, with a brief respite.

NGDP Saga

Why they don´t perceive this and make a real effort to overhaul the monetary policy framework is beyond comprehension!

One thought on “Yellen: “We will keep plodding”

  1. beyond my comprehension also

    NGDP peaked in 2014 and has since gotten weaker and weaker
    RGDP followed NGDP, peaked in early 2015, and has since gotten weaker and weaker

    does the Fed not see this? how can this end well? will the numbers on my FRED-inspired excel spreadsheet suddenly change, revised to show the economy is doing much better than I thought?

    perhaps I’ll just force a smile on my face and say to myself, ‘don’t worry, be happy’

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