Courtesy of Mish.
Fed Chair Janet Yellen has been harping about the “uncertain” outlook for the US economy for years on end.
Perhaps this was inspiration for economists to devise an absurd new index that allegedly measures the amount of uncertainty in the economy.
Before diving into measures of uncertainty, let’s view a few Yellen uncertainty citations.
- March 29, 2016: Yellen: The Outlook, Uncertainty, and Monetary Policy
- February 10, 2016: Outlook ‘Uncertain’ For Global Economy, Yellen Tells Congress
- July 15, 2014: Janet Yellen: ‘Considerable Uncertainty’ In US Economic Outlook
A quick search turns up dozens of such links.
On April 17, Davis Rosenberg said Janet Yellen’s use of one word tells us something has gone wrong.
In a truly seminal speech on March 29th, Janet Yellen used the title, The Outlook, Uncertainty, and Monetary Policy.
I have been in this business for 30 years and have never seen a central bank chief slip the word “uncertainty” into the headline.
Not just that, but she invoked the term no fewer than 10 times to describe the domestic and global macro and market backdrop — this even as we pass seven years since the worst point of the Great Recession and seven years into the most radical easing of monetary policy in recorded history.
It begs the question: what has gone wrong?
Facts of Life
Caroline Baum, one of my favorite economic writers (on Bloomberg for many years until they stopped using much of her material in favor of garbage), has an excellent column on uncertainty on MarketWatch.
Please consider Opinion: Uncertainty is a Fact of Life, So Get Used to It, by Caroline Baum.