Grow Your Way Out of Debt? Don’t Make Us Laugh … |.
What Did She Mean?
Janet Yellen made headlines yesterday. She promised the Fed would be “patient” in raising interest rates. Investors must not have known what she meant.
With the Dow tearing more than 421 points – or 2.4% – higher, half of investors must have thought she meant higher rates later than expected. The other half must have thought she meant higher rates sooner than expected. Treasury bond prices fell. And the yield on the 10-year T-note completed its biggest two-day move higher in 17 months.
Investors give Ms. Yellen far too much credence either way. Will she raise rates sooner… or later? She probably doesn’t know. She is just reading the newspapers as we do, and wondering when she can get away with it.
She looks in the mirror in the morning and gasps… incredulous of the way people overestimate her. She knows – at least before putting on her makeup – that the whole thing is nothing but face paint and false accounting.
Yellen just doesn’t want to be the Fed chief who has to admit it. And she certainly doesn’t want to be remembered as the one who finally popped the biggest credit bubble in history and ushered in a global depression.
