Items tagged with: SanFrancisco
An interview with Janet Yellen, chairwoman of the Federal Reserve
“He's made comments about the Fed having an exchange rate objective in order to support his trade plans, or possibly targeting the U.S. balance of trade. And, you know, I think comments like that shows a lack of understanding of the impact of the Fed on the economy and appropriate policy goals.”
And we've now gotten down debt burdens, they've been gradually worked down. We had a household sector that in the run-up to the crisis was highly leveraged, was really spending a great deal based on borrowed money. And that's changed substantially now. Debt burdens in the household sector are way down, both because of what's happened with mortgage lending, but also because of a low-interest-rate environment. And we do have solid spending, consumer spending in the U.S. economy, and it's not based on a housing bubble or unsustainable borrowing.
The Fed wanted to see them tighten. They raised interest rates in order to tighten them. For a long time, the stock market was rising so much and long-term yields were coming down. There wasn't really any meaningful tightening of financial conditions. But then things turned, and now financial conditions are tighter, and that will have some depressing effect on spending too.
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