The Fed Jawboning Continues: Fed’s Yellen Calls Recent Economic Weakness ‘Transitory’

I’ve been in the business since 1997. I’ve never seen the Fed talk so much shit. It’s outrageous, frankly. This is, without question, much worse than parsing Greenspan’s unbelievably difficult to understand doublespeak and much harder than determining the next Fed’s actions by the length of Bernanke’s beard.

Hellen’s beard is the longest of them all. This shit is unreal.

In a speech give today, Yellen warned Fed groupies to avoid taking 1 poor economic data point too seriously, calling it ‘transitory.’

The Fed is data dependent. Also, she posed a series of questions, in prepared remarked, asking whether the recent weakness in the jobs report was indicative of Americs being as ‘full employment’?

“Although this recent labor market report was, on balance, concerning, let me emphasize that one should never attach too much significance to any single monthly report,” she said in prepared remarks.

Still, Yellen said that an important theme of her remarks is the “inevitable uncertainty surrounding the outlook for the economy.”

“The uncertainties are sizable, and progress toward our goals and, by implication, the appropriate stance of monetary policy will depend on how these uncertainties evolve,” she said.
Key areas of uncertainty, she said, include the resilience of domestic demand, the international economic situation, productivity growth and the inflation outlook.

On domestic investment, Yellen said she suspects there’s a “transitory element” to recent weakness, but she acknowledged that labor market data “raise the less favorable possibility that firms may instead have decided to expand their operations more slowly.”

On the international front, Yellen said she is optimistic that foreign headwinds are fading, but added that the chance of a so-called “Brexit” could have “significant economic repercussions.” (Britain is holding a referendum on European Union membership later this month.)

“Is the markedly reduced pace of hiring in April and May a harbinger of a persistent slowdown in the broader economy? Or will monthly payroll gains move up toward the solid pace they maintained earlier this year and in 2015? Does the latest reading on the unemployment rate indicate that we are essentially back to full employment, or does relatively subdued wage growth signal that more slack remains?” she asked

She’s a clever one.