Janet Yellen, president of the San Francisco Fed, said yesterday after a speech that the Federal Reserve will not permit a return to 70’s era stagflation. Yellen:
“I’ve said that I don’t think this is the ’70s, but we can’t let it get to the ’70s. Our behaviour is critical to that. We have to be the barrier.”
Yellen stopped short, however, of suggesting actual rate increases, insisting that it was still too soon. So we’ll believe this tough talk when the Fed gives us actions, not words.