Today, Ms. Yellen, the new chairwoman of the Federal Reserve gave her first major speech under her new title. Many expected that a woman taking the position would cause a radical shift, but her sentiments gave the air of continuity rather than departure. She stated that she will continue policies that cut back on bond buying, a major emphasis of her predecessor, Ben S. Bernanke. Yellen also encouraged an increase in communication with investors and the public. She feels that communication and transparency enhances the power of monetary policy. This seems to be a favoring toward a completely informed society to me! One of the key elements to a successful and efficient market. While the economy is still a bit bruised by the collapse of the housing bubble, Yellen seems optimistic that the Fed has the power to change the current economic situation. As she was making her speech, it seemed that investors let out a sigh of relief and magically the stocks began to rise. This seems like the Fed is off to a great start!
http://www.nytimes.com/2014/02/12/business/yellen-testifies-in-congress-on-economy.html?ref=economy&_r=0
1 comment:
It’s pretty fascinating to read that the stock market rose after Ms. Yellen’s speech as the new chairwoman of the Federal Reserve. Could it even be a coincidence? Either way, it could be an example of how rises in consumer/investor confidence can make such an impact. The fact that she is also continuing Mr. Bernanke’s plans will hopefully sustain any stability in the market itself. Hopefully, Ms. Yellen’s prepared leadership and new perspectives will create more jobs and increase transparency.
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