The Yellen Effect: Markets and a High-Pressure Economy

The transcript discusses the Federal Reserve's approach to managing the economy, focusing on the concept of running the economy hot to close the gap caused by the Great Recession. It highlights the roles of key figures like Stanley Fischer and Janet Yellen in communicating strategies and managing market reactions. The discussion also covers the impact of hypothetical statements on the bond market, the challenges of full transparency, and the potential steepening of the yield curve due to inflation expectations.

What are the implications of running the economy somewhat hot according to the text?

How does Stanley Fischer's role relate to calming fears in the economy?

What concerns were raised about the bond market in relation to the Fed's statements?

What does the text suggest about the Fed's communication strategy and its impact on market participants?

How might the Fed's approach to managing the yield curve affect inflation expectations?