As I wrote yesterday, Fed chief Janet Yellen was walking a razors edge.
The fed chief needed to lose the word patient, but cannot raise rates anytime soon.
So she said the Fed was data dependent — again something I said — but what I did not see coming was when she threw some of that data under the bus.
Basically the Federal Reserve is telling everyone that the US job numbers are bogus.
Yes the Fed did say it would consider raising rates when unemployment rate hit 6.5%. But now its 5.5% and Yellen & Co. still do not believe the number is low enough to suggest a recovery.
Interesting how the Fed –unlike the White House — does not see the jobless rate as a good sign.
And I agree. As I have written if someone has been forced to take 2 or 3 part-time jobs to replace a full-time job with benefits, then how is he or she better off.
Yellen cited the labor participation rate — which is the lowest in some 45 years as a better indicator of health in the economy. Again something I agree with and have written about.
Equity traders saw this admission for what it was. Yellen told the Street in code, “I can’t raise and I can’t fold” when she said, “While we are not patient, we are also not impatient.”
And there went the 2015 rate rise for economic reasons.
Pump up the bubble.