Reserved Yellen Sharpens Focus on Inflation
The Age [Melbourne]
Dr Yellen on Thursday (AEST) said slowing inflation was only "partly the result of a few unusual reductions" in parts of the consumer price index, a less confident wording than the Fed has used in the recent past.
"When the Fed makes a deliberate change in its phraseology, it matters," said Lou Crandall, chief economist at Wrightson Icap. "It shows the Fed is getting a little less prepared to give inflation the benefit of the doubt."
The subsequent questioning of the Fed chief over two days did little to dispel the market's view that she was providing ammunition to the doves. While prices were likely to rise eventually given the robust US jobs market, the central bank was "watching inflation very carefully", Dr Yellen admitted to the assembled lawmakers.