Janet Yellen’s confirmation hearings, the latest step en route to her appointment as the next Federal Reserve Chair, provided few surprises. Her overall message was one of continuity rather than change. Still, Dr. Yellen’s prepared comments and her responses to the questions that followed highlight several take-away points that help us understand where the Fed will head under her leadership.
First, and most important, Dr. Yellen acknowledged her own role in formulating the two percent long-run inflation target adopted by the Federal Open Market Committee (FOMC) last year, and reaffirmed her continuing commitment to that target.
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