"The economy has made considerable progress in recovering from the largest and most sustained loss of employment in the United States since the Great Depression"
-Janet Yellen, Fed Chairwoman
The world's top central bankers appeared to find it difficult to move away from the ultra loose policies they have embarked on repeatedly during a long and fragile global recovery. During long-awaited speech at Jackson Hole, Fed Chairwoman Janet Yellen expressed concerns about moving rapidly away from the Fed's ultra-low interest-rate policies even as the job market improves and inflation inches higher. She said that the recent rapid decrease in the jobless rate likely overstates the labor market health, and the Great Recession may have caused drastic changes in the job landscape. Thus, she reiterated the pledge to lift the benchmark interest rate only in case the labor market continues to gain traction at a more rapid pace than anticipated by the Committee or if inflation increases more rapidly than projected. Prior to the speech Yellen was not expected to announce major policy changes, but investors hoped she would provide some clarity on when the Fed will consider raising interest rates.
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