Congrats Janet Yellen – Now in the Pilot’s seat

Congrats Janet Yellen on your appointment to the Fed as Chairwoman. Akerlof and Schiller are your inner-circle, pretty sweet. That’s a lot of Nobel laureates over for dinner at one time.

I am very glad the most qualified candidate is female – that is you! Less joyous regarding the dovish stance on rates however.

Being a fed watcher – a bit nerve racking to see your estimation of certain things, regarding projections and cyclical unemployment.

What about structural unemployment. The data says it itself (Beveridge curve) which is discounted in your assessment with anecdotes when it is the data laid bare. At a time of great technological change the jobs done by people are being replaced world-over by computing and automation. The fed will realize this I believe in the rear view mirror (as Alan Greenspan did during his tenure).

Wall St. has valuations way over anything realistic. The street is on an accelerating Nairu-type expectations path. That would be red-lining already if it were consumer prices calculated correctly. –>

Longer-term. The jobs which do come in have been largely of the ‘not high value-add’ variety. That is structural unemployment kid!

I wonder where the demographic projection fit into your speeches and models while soaking up the past speeches.

Your/the Fed’s estimation of the interest rate to a natural 5% after 2015 is dreamy so far as I can tell. 5% increase from below 0% would be historic.

Perhaps Tom Friedman (and also Bob Dylan for that matter) hit these issues correctly. The times are a changin’.  Automation and Demographic changes are by far the biggest factors driving current change so far as I can see. Demographic being the largest and the skills gap in education second. It is happening the world over.

Recovery/productivity/cyclical guesses about growth need to address and factor those issues more clearly imo. America will be an older nation, that is a demographic fact. Notwithstanding the minority of Googler’s and others in high-skilled jobs the main belly of the US will face a long period of ‘long-run’ structural unemployment. Employment below 5% will be a ‘drug high’ and not sustainable without the skills base changing.

Congrats to your posting and good to see a Brooklyn accent on that podium. Every Fed Chair since 1990 has been guilty of being too dovish.

You’re now in the hot seat.

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