What message will Janet Yellen send?
by Thomas H. Kee Jr.
Let’s assume Federal Reserve Chairwoman Janet Yellen thinks an interest-rate hike is in order, and she is prepared to implement subtle changes to language that might suggest this too.
We all know that she has played to the whim of Wall Street and consensus expectations for quite some time. That is unlikely to change. It doesn’t mean she will never raise rates, but it does imply that if she believes a rate hike may be in order either in September or December, any shifts in her language would be accompanied by language that softens the impact on financial markets.
I am speaking from an objective position here, but it is close to reality too. Even if she believes a rate hike is in order, as the data support and I have suggested based on Fed mandates, she is unlikely to do anything that would rock the boat. I can, for example, imagine her sounding extremely dovish, while adjusting language at the same time.