Tea Leaves Say Yellen Might Push for Looser Monetary Policy


Jon Hilsenrath reports on a new Fed study suggesting that monetary policy ought to remain loose for a very long time:

The Federal Reserve could help drive down unemployment faster if it promised to keep short-term interest rates near zero for longer than currently envisioned by officials or investors, according to a new research paper by a top central-bank staff member

….The research paper—written by William English, the head of the Fed’s monetary-affairs division and two other authors—argues the Fed’s unemployment threshold for rate increases would be more effective if it were lower than 6.5%, possibly as low as 5.5%. In effect that would mean waiting until the job market got much better before raising rates.

….As part of the exercise, Mr. English relied heavily on computer forecasting models known as “optimal control” programs. That’s notable because these programs have also been cited by Janet Yellen, the president’s nominee to lead the Fed after Mr. Bernanke’s term expires, in speeches to defend the central bank’s easy-money policies.

I guess this falls into the category of tea-leaf reading, trying to figure out what kind of policies Yellen will push if she’s confirmed as the next Fed chairman. Take it for what it’s worth.

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THE FACTS SPEAK FOR THEMSELVES.

At least we hope they will, because that’s our approach to raising the $350,000 in online donations we need right now—during our high-stakes December fundraising push.

It’s the most important month of the year for our fundraising, with upward of 15 percent of our annual online total coming in during the final week—and there’s a lot to say about why Mother Jones’ journalism, and thus hitting that big number, matters tremendously right now.

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So we’re going to try making this as un-annoying as possible. In “Let the Facts Speak for Themselves” we give it our best shot, answering three questions that most any fundraising should try to speak to: Why us, why now, why does it matter?

The upshot? Mother Jones does journalism you don’t find elsewhere: in-depth, time-intensive, ahead-of-the-curve reporting on underreported beats. We operate on razor-thin margins in an unfathomably hard news business, and can’t afford to come up short on these online goals. And given everything, reporting like ours is vital right now.

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