Yellen offered hints a what's next
It was a long one. Yellen's press conference lasted over an hour and she said very little that was interesting or notable.
1. No reverse on taper
Yellen argued the Fed could cut rates or re-introduce forward guidance before backtracking on the taper plan that was outlined today. By the same token, she said that even if inflation picked up, the FOMC would prefer to use rate hikes. It will take a material downgrade or upgrade to change her stance
2. There are real doubts about inflation
The Fed is having a moment of doubt on inflation. Yellen humbly admitted that transitory factors no longer explain why inflation hasn't materialized. She recognized increasingly-widespread theories that we're in an era of low inflation, due to structural changes. The Fed doesn't believe it, but a seed of doubt is planted.
3. Yellen is done
This takes some serious reading between the lines but he first hint was her offering that she hasn't been invited to a meeting with Trump since the start of his term. If he was considering keeping her on, he would have met with her. Second was a few references to how 'future policymakers' will have to deal with questions or a potential crisis/recession. She was so casual, it was virtually a dismissal of the possibility it would be her making the decision. Someone looking +4 years ahead would be more cautious.
