Tags: Furchtgott-Roth | Yellen | worry | happy

Furchtgott-Roth: Yellen Offered Too Much 'Don't Worry, Be Happy' to Congress

By    |   Saturday, 10 May 2014 12:41 AM

Diana Furchtgott-Roth, a senior fellow at the Manhattan Institute, wasn't too impressed with Federal Reserve Chair Janet Yellen's testimony to the Joint Economic Committee Wednesday.

Furchtgott-Roth thinks Committee Chairman Kevin Brady, R-Tex., had it right when he accused Yellen of offering a "don't worry, be happy" monetary message.

Editor's Note: Secret Investment Calendar 96% Accurate (And Extremely Profitable)

Several of Yellen's points "made no sense," Furchtgott-Roth writes on MarketWatch.
  • "Most important, will the Fed be able to keep inflation in check at 'only' 2 percent, its target goal, after its massive monetary accommodation?"
  • "Asset bubbles." Yellen underplayed the risk of a bubble in the stock market, Furchtgott-Roth, says.
  • "[The] Fed is responsible for increased income inequality," as Fed scholar Allan Meltzer points out.
  • "The role of forward guidance." The Fed has made its guidance so wishy-washy that it "is essentially no guidance," Furchtgott-Roth writes.
  • Yellen attributed the paltry 0.1 percent GDP growth rate of the first quarter to weather. But "there are good reasons not to blame the weather," Furchtgott Roth says.
  • As for the drop in the labor force participation rate, Yellen pegged it to retirements, "even though young and middle-aged people are also working less," Furchtgott-Roth writes.
Renowned economist Nouriel Roubini of New York University says the Fed faces a dilemma.

"If you exit [from easing] too soon, you get a bond market crash and kill the economy," he told Fox Business Network.

"If you exit too late, you create a financial bubble. That's the biggest challenge for the Fed in the next three to four years."

Editor's Note:
Secret Investment Calendar 96% Accurate (And Extremely Profitable)

© 2020 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Economy
Diana Furchtgott-Roth, a senior fellow at the Manhattan Institute, wasn't too impressed with Federal Reserve Chair Janet Yellen's testimony to the Joint Economic Committee Wednesday.
Furchtgott-Roth, Yellen, worry, happy
269
2014-41-10
Saturday, 10 May 2014 12:41 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved