Jim Grant on Janet Yellen’s Capitol Hill Visit

Jim Grant of Grant’s Interest Rate Observer shares a few thoughts about Federal Reserve Chairman Janet Yellen’s appearance yesterday before the Joint Economic Committee.

Grant explains how Yellen could make herself more clear during such visits:

If she said, for example, we believe in price control, we believe in market manipulation, and we believe in the Phillips curve, the Phillips curve being the trade-off between employment and inflation. Each of these ideas is widely discredited.

Each is dearly embraced by the federal reserve and you can in fact tease out from her remarks that she is a believer in all three of these heresies. It’s not chairman Yellen, but the entire fed is built around these doctrines.

Note that the oddity discussed in the opening seconds is occurring yet again today as bond prices are rising (somewhat disturbingly, along with stock prices) despite the certainty of the central bank buying fewer bonds next month than they did last month. It appears the bond market knows something that neither the Fed or the stock market know.