Janet Yellen Rewriting FED’s Rules On Wage And Inflation!

As a currency trader that focuses on trading US Dollar pairs, it is highly imperative that you keep on eye on FED’s policies. FED’s policy decision affect the currency market heavily and if you are not aware of them you can be caught off guard. FED is tasked with the policy of keeping the US economy fully employed with inflation not going higher than 2%. Till now it has done its job well with some hiccups like letting the US Housing bubble develop and not puncturing it which ultimately resulted in the crash of 2008.

Janet Yellen is rewritting wage and inflation rules. Research from the Fed’s staff and her own past academic work both suggest there may be more slack in the economy than inflation hawks believe, and that businesses in recent years have been slower to raise prices than they were previously.

The connection between faster wage gains and a healthy jobs market is emerging as a core principle for the new Fed chief, who has said she expects pay to accelerate to something close to the long-run growth rate of 3 percent to 4 percent a year from the current level of around 2 percent.

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