Yellen and the super-accommodative starting point
- Fed Chair Yellen was relatively optimistic about economic prospects in the US. The relationship between economics and markets is arguably much weaker than it was twenty years ago, and she is content to wait and see. She is before the Senate today.
- Yellen did stress that current policy is accommodative. With a) real Fed Funds falling this year and b) the central bank balance sheet to GDP level significantly above neutral, that comment may be a polite understatement.
- European finance ministers gather in Brussels, in the wake of media reports that they will urge the G20 to do more for growth. European finance ministers themselves have not, perhaps, led the charge for structural reform and growth stimulus.
- A couple of Bank of England speakers are on the agenda, but with the referendum on the EU looming the role of the Bank of England has, perhaps, been somewhat sidelined for now.