The sense that change is afoot lends power to the U.S. central banker’s words
If you live in a cave and survive on nuts, berries and the odd roasted squirrel, what U.S. Federal Reserve chair Janet Yellen says today won’t make much difference to your life. At least not right away.
But for the rest of us, from Saskatoon to Shahjahanpur, what she says will matter. The powerful Yellen may talk softly, but she carries an enormous stick.
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Of course the U.S. central bank always has a certain amount of clout. But there are reasons that Yellen’s pronouncements today on interest rates may be more newsworthy than usual.
The first thing is the way Yellen’s message will be presented. Even when the Fed issues a written statement, market analysts go over the wording with a fine-toothed comb, interpreting subtle changes in wording.
Like the printed statement, Yellen’s speech will also be carefully penned, but emphasis can lend special meaning to a prepared text.
Most revealing of all is the question and answer period, when Yellen stands up and, in the glare of camera lights, faces the slavering wolves of the financial press who will try to tempt her into tiny indiscretions.
Adding to the import of today’s speech and news conference is the timing. It may be an illusion, but it feels as if the world is currently on the knife edge of change, what mathematicians call an inflection point, where things, once trending one way, suddenly begin trending another.
In the fullness of time we may find out we were wrong, but today part of Yellen’s impact will be the sense that change is afoot.
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