Janet Yellen has some rewriting to do. As she prepares to deliver her first testimony to Congress as Federal Reserve chairman, the central bank’s tactics for guiding the recently more turbulent financial markets need reworking.
Even as unemployment nears the 6.5 percent marker the Fed had set for starting discussions on raising interest rates, the central bank is still easing policy by continuing to buy bonds, albeit at a reduced rate.
“She needs to provide more clarity about what forward guidance is going to look like,” said Russ Koesterich, chief investment strategist at New York-based BlackRock Inc., which manages $4.3 trillion in assets. “There is some uncertainty about how the Fed is going to approach monetary policy.”