Did Yellen Err With `Six Months’ Rate Commentary?

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

March 20 (Bloomberg) -- Bloomberg Contributing Editor Jeffrey Hayzlett and Bloomberg’s Peter Cook examines Janet Yellen’s communication skills in her first press conference as Federal Reserve Chairman on Bloomberg Television’s “In The Loop.”

Communication matters for everyone, especially for the federal reserve.

Especially now.

If she abandons the 6.5% threshold of unemployment, that is the key metric that the fed looks at.

Everybody knows -- everybody is going to be trying to read the tea leaves to try to figure out what they're going to do.

In terms of her message yesterday and the market selloff, did she make a mistake?

She left with a big mistake.

She has to lead with authority.

If she changes her dress color or if someone changes their tie color, it sends the markets reeling.

She needs to look at some time frames to set in.

She will have to come back.

I would make the time frames shorter.

The other thing, quantify it a little bit more.

She took away the six point what ever it was and now she's putting in the time frame.

When it is not right, when people start to misuse her words, she will need to confront it.

Peter cook, communication is important from the fed, at the same time, i think investors have grown to not trust it entirely.

We saw that play out last september.

Everyone anticipated that there would be a taper and in fact, we got none.

There were investors talking at the time that were frustrated.

They said at the fed is trying to communicate something, they ought to follow through on the message that they are communicating.

How important is the follow-through going to be for this fed chair?

The fed more than anything else does not want to box itself in and convey to the market something that is not going to happen.

The statement yesterday -- she went out of her way to get rid of the 6.5% unemployment threshold, give a range of other guidepost that will lead the fed down the path to higher interest rates, which we know are coming.

They are not boxed in.

They have latitude, depending on what happens with the numbers.

A lot of people in the markets will not like that.

They will like specificity and hard and fast rules.

This policy that they will pursue gives them a lot of opportunity to change their mind down the road for whatever reason.

People are not going to like that, but that may be the most important communication skill or janet yellen now.

Does the fed need to play a little harder to get?

We are going on five plus years of record low rates.

All of this qe and as i was saying yesterday, no ring on the finger.

We still have anemic growth.

Should the fed be doing something different?

Should the fed be playing hard to get?

Not communicating as much to investors.

People need to feel the threat of higher interest rates in the future.

Maybe that is enough to incentivize you to go out and do something.

I think you are spot on.

I watched you report the story yesterday.

When the fed it first came out, they used to issue statements that were 90 some awards.

Now there is shanks -- now they are issuing statements 900 words long.

If you shut up, it lets speculation and let people figure things out.

They can deliver it.

I think that is called leading.

I think they should be doing that.

We have a market that has been on a tear because of the federal reserve.

The worry ultimately, we saw this play out with mr.

Greenspan, the worry is that you are creating an asset bubble in certain pockets of the economy, whether it is the stock market high end real estate, a certain percentage of the american population and the international population is benefiting from fed policy.

Not everyone.

What she said yesterday, she took too long to say it.

The opening comment, she repeated herself to her three times.

Ultimately, what is going on here is the punch bowl is going to start being taken away.

There are a lot of people that are not going to like that.

That is the reality.

That is the message that is going to be conveyed with what the fed is doing right now.

It will be a long time before we see rates go up.

Even if rates start to go up, that does not mean they are going up to record low -- record high levels from the record low levels.

That is another message i am not sure the markets have totally received yet.

She needs to listen to henry kissinger.

He walked into a hint -- a press conference and said what questions do you have my answers -- for my answers?

She faced it very quickly and very concise and sticks to that script.

She doesn't get out there and being way too long.

I am in favor of hearing from the fed chair, but there was a day when they were not as forthcoming with information.

My big fear is that her answer to the question about what is a considerable period of time is around six months.

We may never get a clear answer from janet yellen ever again.

She will be a master option skater from this point on.

She has been burned.

She referred to her dashboard.

She said here is what is on my dashboard.

I thought dashboard -- that is a

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change