Yellen legacy-to-date sparkles on jobs but stumbles on inflation

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.