Economic Update

Reed and Mike were invited to attend a luncheon featuring the newly appointed Federal Reserve Chair, Janet Yellen. The lunch, hosted by the Economic Club of New York, gave Dr. Yellen an opportunity to detail the Federal Reserve Board of Governors, and specifically the Federal Open Market Committee's (FOMC) assessment of the economy. She acknowledged "the path of the economy is uncertain, and effective policy must respond to significant unexpected twists and turns the economy may take". She continued by detailing some of the headwinds, such as stubbornly high unemployment rate, including an abnormally high length of time some of the unemployed have been out of work; and lower than anticipated inflation (some inflation is often good for a recovering economy).

The overall presentation was very comforting because Dr. Yellen emphasized that the Fed stands ready to assist the economy in any way, and, more importantly, stands ready to change its strategy as conditions change. She stated the FOMC will continue to "monitor the economy for signs that events are unfolding in a materially different manner than expected and adjust policy in response in a systematic manner". This openness, oddly enough, is a fairly new approach for the once much more secretive FOMC.

The article below describes her comments in more detail.

Link to article: Click Here