Courtesy of Mish.
Yellen Yap Silliness
The spotlight on Fed Chair Janet Yellen is rather amusing given she is more disingenuous than former Chair Ben Bernanke. Some of the headlines are downright silly. For example, Bloomberg reports Dollar Rises to Highest in 3 Weeks on Yellen Comments.
The dollar reached the strongest in a month versus the euro as wholesale prices in the U.S. rose more than forecast and the Fed saw modest to moderate growth in June. New Zealand’s dollar slumped the most in seven weeks after inflation accelerated slower than expected and a gauge of dairy prices dropped to its lowest since 2012. South Korea’s won slid to the weakest since April.
Yellen testified before the House Financial Services Committee today that she’s not seeing “alarming warning signals” in markets.
“My general assessment at this point is that threats to financial stability are at a moderate level and not a very high level,” she said. While some asset values “may be on the high side and there may be some pockets where we see valuations becoming stretched,” in general “price equity ratios and other measures are not outside of historical norms.”
US Dollar Weekly Chart
click on chart for sharper image
Questions of the Day
- Did the US dollar rise because of what Yellen said or in spite of what Yellen said?
- Was the move based on wholesale prices or other economic data, as opposed to anything Yellen said?
- What about none of the above? Was this a random fluctuation not attributable to anything?
- Even if the move in the US dollar could reasonably be attributed to Yellen, was the move worth mentioning in a headline?
Yellen Yap Lies
Let’s move from silliness to outright lies, and an excellent post by Yves Smith on Naked Capitalism that discusses the lies (whoppers).
In response to the New Yorker article The Hand on the Lever regarding “How Janet Yellen is redefining the Federal Reserve”, by Nicholas Lemann, Smith accurately assesses the setup in her coverage Yellen Tells Whoppers to the New Yorker
A Nicholas Lemann profile of Janet Yellen in the New Yorker, based on interviews with her, is creating quite a stir, and for many of the wrong reasons. The article verges on fawning, but even after you scrape off the treacle, it’s not hard to see how aggressively and consistently the Fed chair hits her big talking point, that’s she’s on the side of the little guy. …
