The New Fed Team Will Inherit Inflation Miss That’s Mystifying Yellen
- By early 2018, turnover to reshape Fed’s policy-setting board
- ‘Do they believe the wolf is coming,” or will they not worry
Yellen Says Inflation Shortfall This Year Is a 'Mystery'
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Federal Reserve Chair Janet Yellen’s inflation strategy may have a shelf life of about four months. After that, a gang of newcomers might have to decide what to do next.
Given such unknowns, central bank transitions are risky for investors. That’s one reason U.S. presidents have a long history of reappointing Fed chiefs. By early 2018, as many as three new governors and a vice chairman will have the power to decide whether they maintain Yellen’s strategy of gradually hiking into an inflation “mystery,” as she calls it. Yellen’s four-year term as chair ends in February, and an extension isn’t guaranteed.