Federal Reserve Chairwoman Janet Yellen indicated Monday that the era of extremely stimulative monetary policy was coming to an end.
In a public discussion at the University of Michigan, Ms. Yellen said the Fed was moving away from its efforts to revive a recession-scarred economy and focusing instead on maintaining the gains of the past few years. That will change the central bank’s policy-making stance, she said, noting that Fed officials plan to continue gradually raising interest rates unless the economy begins to deteriorate.
“Where before we had our foot pressed down on the gas pedal trying to give the economy all the oomph we possibly could, now [we’re] allowing the economy to kind of coast and remain on an even keel,” she said. “To give it some gas, but not so much that we’re pressing down hard on the accelerator.”
Ms. Yellen said the Fed is “doing pretty well” in meeting its congressionally mandated goals of low and stable inflation and a full-strength labor market.
New Fed Message
This new Fed message will last until either the GDP or the stock market tanks. We will find out more on April 28 when the BEA posts first-quarter GDP.
Mike “Mish” Shedlock