Sunday, December 22, 2013

Roubini : Yellen is dovish, but she is not the only one to decide

Could Janet Yellen, Ben Bernankes successor at the Fed, be even more dovish than expected and postpone the tapering even further?

Nouriel Roubini : Yellen is dovish, but she is not the only one to decide, under Bernanke the Fed has developed into a collegial democracy, it’s not the kingdom it used to be under Greenspan anymore. All of the twelve Members of the FOMC have their own strong view and the chairman has to forge a collective decision. And all of them, including Yellen, are convinced that QE hast to be phased out at some point. If the economy will create about 200000 jobs a month and the unemployment rate declines, even if in part due to a falling participation rate, then the FOMC will start doing less QE. Yellens dovishness will manifest itself in a more aggressive forward guidance rather than in a sort of QE forever. - in

Nouriel Roubini
Nouriel Roubini
Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics 

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