Anna Child Group
The world is a better-looking place than one week ago, and Federal Reserve Chair Janet Yellen whispered “Bang” today but did not shoot. Thus the great barometer, the 10-year U.S. Treasury note, rose a bit in yield, from 2.33 percent last week to 2.4 percent today, mortgages following.
At the end of each August the Kansas City Fed hosts a meeting of the world’s central bankers in Jackson Hole, together with economist and media hangers-on. In theory, a casual affair, so let your visual imagination run.
Bang image via Shutterstock.
We used to think of Alan Greenspan sitting by the campfire in his three-piece pinstripes, leading the singing of sad cowboy songs with new lyrics about the need to wreck economies in order to save them. Yellen has a wonderful Brooklyn sense of humor. Consider her barely 5-foot frame in waders headed out into the Snake River.
Her speech this morning was a detailed rundown on a labor market that has “yet to fully recover.” The whispered bang was in this line: “But if progress in the labor market continues to be more rapid than anticipated by the Committee. …”
When she used the same phrase earlier this summer, we wondered if the word “continues” was intentional — that the labor market was already doing better than the Fed expected. Fed chairs very rarely misspeak; to see “continues” again we should assume it means just what it says, and the Fed is closer to a rate hike than many in the market assume.
U.S. economic data this week was just as positive as it was negative last week, especially housing data. Better, but not breakthrough. Poor data continued to come in from Europe, Japan and China.