Yellen: the labor market is making progress but has yet to recover … – Il Sole 24 Ore

Yellen: the labor market is making progress but has yet to recover … – Il Sole 24 Ore

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This article was published on 22 August 2014 at 16:08.
The last change is the 22 August 2014 at 17:15.

As expected Janet Yellen not surprised. In his speech during the summit of Jackson Hole, the number one Federal Reserve acknowledged the improvement in the course of the American labor market but remained vague on the subject of interest rates. “The economy has made considerable strides in recovering from the largest and sustained loss of employment in the United States since the Great Depression,” he said.

“These developments are encouraging but are a reflection of the depth of the damage according to which – five years after the end of the recession – the job market has yet to recover fully, “Yellen said in front of the financial elite.

As was done last July in front of the members of the American Congress, Yellen added that if the labor market continues to improve faster than estimated or if inflation reaches target of 2%, the Fed “could raise interest rates sooner estimates. But if progress is struggling to realize, low rates will continue “to stay where they were brought in December 2008, ie 0-0.25%. For now, with the objectives of employment and price stability closer, the emphasis shifts to the weaknesses that still remain.

The number one the Fed has, however, pointed out monetary policy, “you should not rely on a specific indicator (eg, employment data) or model, but rather should reflect the current assessments on a wide range of information in the context of the understanding of a changing economy ‘ .

The annual symposium of the Federal Reserve Bank of Kansas City comes at a time of uncertain growth and central banks that are moving in nearly opposite directions.

The Fed expects to close the purchase plan bond in October, but has assured that it will keep rates low until you have concrete evidence of a labor market in health.

The ECB and the Bank of Japan are instead in a very different position and are considering whether to do more to help the economy. The fear is related to the low rates at the global level that could feed a new financial bubble. Taking advantage of the low cost of money companies have issued a record amount of bonds so far this year, 994.6 billion dollars, 4% more than last year.

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