The bullet that stands out in Fed vice-chair Janet Yellen’s afternoon speech in Berkley, California is that the Fed should vary around a 2% central tendency. 2% is not an inflation cap, she says.
Many investors (mostly gold bugs) fear the Fed will gladly allow inflation to rise above its 2% central tendency. They also fear it will rise above the central tendency and will never look back…
Yellen seemed to signal that the Fed’s calendar guidance may be a thing of the past soon with the Fed shifting to a economic goals, like lowering the unemployment rate.
