Things Got Interesting in Yellen Speech

In a speech on Friday, Federal Reserve chair Janet Yellen stayed her dovish course, maintaining that an increase the federal funds rate “may well be warranted later this year.” She also emphasized the Fed’s data dependence, as well as her general tone of “cautious optimism” in the economy.

Yet it was in her discussion of what she termed “special risks and other considerations” where things got interesting. The first of her three special concerns around hiking rates run along the following lines:

“Some recent studies have raised the prospect that the economies of the United States and other countries will grow more slowly in the future as a result of both demographic factors and a slower pace of productivity gains from technological advances,” the Fed chief stated.


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