Economics

Yellen's Flip-Flop Isn't Guidance

Forward guidance is doing more harm than good.

Can you trust her?

hotographer: Scott Eisen/Bloomberg

In the middle of last year, when quizzing Bank of England Governor Mark Carney about when interest rates might rise, Labour Member of Parliament Pat McFadden accused him of "behaving a bit like an unreliable boyfriend; one day hot, one day cold. And the people on the other side of the message are left not really knowing where they stand." The jarring combination of last week's Federal Reserve decision to keep rates unchanged and Thursday's speech on what happens next makes Janet Yellen his equivalent as an unreliable girlfriend.

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