Yes, Yellen Can Have It All as She Gets Ready to Raise Rates
Low bond yields may help the Fed chair strike a delicate balance
Janet Yellen, chair of the U.S. Federal Reserve, speaks during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, D.C., U.S., on Wednesday, Sept. 17, 2014.
Photographer: Andrew Harrer/BloombergThis article is for subscribers only.
As the job market gains steam, Federal Reserve Chair Janet Yellen faces a massive challenge to adjust her monetary levers just right: She wants to keep the recovery going without stoking a bubble or spurring inflation. It's a delicate balance that has bedeviled many central bank chiefs in the past.
A dramatic drop in U.S. bond yields over the past year might be just what Yellen needs to strike that balance, according to two International Monetary Fund economists.