Yellen legacy-to-date sparkles on jobs but stumbles on inflation
However, low rates of inflation haven't hurt the US economy, and prices are rising gradually with wages
Washington
ON the employment side of the Federal Reserve's twin objectives, chair Janet Yellen's track record so far has been a sparkling success. On the other, there's a problem with a stubborn, uncooperative indicator: inflation.
The Fed's preferred price measure has averaged 1.1 per cent since Ms Yellen took the US central bank's helm in February 2014 - a significant miss of the Fed's 2 per cent inflation target. It averaged 2.5 per cent during Alan Greenspan's chairmanship between 1987 and 2006, and 1.9 per cent during eight years under Ben Bernanke. If that trend continues, and with seven months left in Ms Yellen's four-year term unless she's reappointed by President Donald Trump, the performance would make her the only chair in 30 years not to achieve sustained inflation close to the Fed's declared goal. That's a stunning irony for Ms Yellen, who was characterised as a monetary "dove" when she took office because of the view that she'd tolerate higher inflation in exchange for labour market gains.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
International
Stormy Daniels’ ex-lawyer in the hot seat at Trump trial
New Zealand says ‘seriously concerned’ by China’s increased security actions in Pacific
EU, ISSB agree on minimising overlaps in company climate disclosures
US law firm Mayer Brown to split from Hong Kong partnership
US labour costs rise by most in a year as productivity cools
US trade deficit narrows slightly in March