And this answered my question: One weak spot is that Yellen, an academic by nature, was not very adept in her relations with Congress. As a result, some analysts don’t think she will taking on the role of shuttle diplomacy with leadership on Capitol Hill, a role that Treasury Secretary Steven Mnuchin has relished. “I do not see her filling a role similar to current Secretary Mnuchin’s, as I highly doubt we will see Yellen engaging in difficult one-on-one negotiations with Senator [Mitch] McConnell and others on the Hill,” said Stephen Stanley, the chief economist of Amherst Pierpont Securities, in a note on Monday. Perhaps Biden, a master of the Senate, will keep that role for himself. https://www.marketwatch.com/story/y...ic-policy-stage-11606171052?mod=mw_latestnews
If the economy and the markets tank again... She'll encourage to print money more money more money. Be ready to add a bunch of cheap stocks to your investment portfolio. wrbtrader
Well she did raise interest rates quite a few times during her term as the Fed chair so she's not as dovish as everybody thinks.
There, you said it yourself - no game changer. And the future of America, well, it's the mother of all bubbles popping.
Paul Volcker raised interest rates and successfully managed inflation in the 1980s. I was in the US during the early 80s and there wasn't much talk about the Fed. Of course, internet did not exist back then. Unlike now, Reagan didn't bother the Fed. Why is inflation not a problem now ? Cheap oil. Consumer staple and discretionary are mainly imported. Ya... those cheap craps from China. But not for food, farm land, housing etc. Did they change the measure of inflation ? Janet Yellen did try to shrink the Fed balance sheet. The Fed's massive balance sheet is actually shrinking - Business Insider
And the Federal Reserve sets interest rates and monetary policy - not the Secretary of Treasury. The Fed recently stated said that rates will remain low for years absent signs of real inflation.
Most are assuming near zero rates to continue for quite some time. I don't however. I see signs of inflation heating up already and I expect the Fed to embark on gradual rate increases by the fourth quarter of 2021 if not sooner. The equities market should cool as the dollar rises. We should see less volatility. Yellen, having been Fed Chair, should understand well the challenges faced by Powell at the Fed. Our Treasury and Fed will be in good hands. Important to keep the crackpot Shelton off the Fed board. Fortunately, the damage one person who is not the Chair can do is limited. She would be mainly an embarrassment. If Moscow Mitch manages somehow to slip her onto the Fed Board, she'd be one of Trump's several parting gag gifts to the American People. Some of his "gifts," however, are no laughing matter.
The effect on inflation of increasing the amount of outside money spent into the economy (deficit spending) isn't instantaneous. Inflation might have become a problem by now had it not been for a severe recession in the services sector which was countered by necessary outside money being spent into the economy (even bigger deficits). We are seeing inflation in the "goods" sector, but the mean is held down by the severe service sector recession. We will however see inflation pick up steam as the service sector recovers. Biden plans to ask Congress to raise marginal tax rates on high incomes (not enough in my opinion). That could help a little, but won't he be stymied in the Senate unless the Democrats can win two Senate seats in Georgia? Most likely the main help will come via the Fed becoming a net bond seller as the economy returns to normal in the third quarter of 2021 -- McConnell can't interfere much with that. This, plus steady incremental rate increases, should hold inflation to a manageable level.
That's the key, and Personally I believe we already see signs in inflation but dampened now by a severe recession in the services sector> I don't think that will last beyond the third quarter next year. Non-negligible inflation is on the way.