HALISTER1: Yellen ‘May Borrow’ From Bernanke for Jackson Hole: Renaissance

Yellen ‘May Borrow’ From Bernanke for Jackson Hole: Renaissance

(Bloomberg) -- Fed Chair Janet Yellen “may borrow from Bernanke’s blog” post last week about the drop in the Fed’s expectation for the forward path of U.S. rates, Renaissance Macro Research economist Neil Dutta writes in note.
  • NOTE: Yellen is scheduled to speak at annual Jackson Hole symposium on Aug. 26
  • In Aug. 8 blog, Bernanke ascribed decline in Fed’s expectation of forward path of rates to 3 factors: lower long-run potential growth, lower natural rate of unemployment, lower neutral rates
    • While view doesn’t call for “wholesale break” from Fed’s current strategy, Bernanke concluded that implications “are generally dovish”
  • Notably absent from Bernanke’s blog was any mention of USD
    • With monetary policy outside U.S. still quite easy, there’s a risk that Fed hikes may translate more rapidly into USD appreciation
    • “We suspect this is now the consensus view on the FOMC, resulting in a very cautious approach to future rate hikes”
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Ben Bernanke (Brookings Institution/The)
Janet Yellen (Federal Reserve System)
Neil Dutta (Renaissance MacRo Research LLC)

Topics
BGOV Finance

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