When is a ceiling not a ceiling? Answer: when it’s a target.
Janet Yellen, doncha love her, eh? And let’s face it, she’s right: when it comes to the US National Debt ceiling, it certainly does present a moving target. Life’s safer that way….ceilings are really just the horizontal version of the side of a barn – if you’re a politician out to make a hit, you just can’t miss a ceiling, right? But whooaaa….those pesky targets, they keep on moving.
That observation was but one small sample of the gibberish offered by the US Fed Chair today….jargonised piffle dutifully recorded by the major networks, not one of whom seemed prepared to press the buzzer and then call out Janet for liberally irresponsible spreading of horseshit.
But of course, we must all accept by now (surely) that Ms Yellen is herself the ultimate moving target. Asked at the presser if she had changed her view about global economic risks, she said no, she had not changed her mind. Problem is, I would challenge anyone to sum up (beyond the yes/no/reservations thing) exactly how or when she had ever spoken her mind on the subject. Equally, if she hadn’t changed her mind on risk, why had she now switched away from flat to hiked?
Indeed, when asked to explain the inexplicable, Janet Yellen’s capacity for impenetrable obfuscation exceeds anything ever achieved by Alan Greenspan. Expanding on her view of the global economic situation, she told one media inquisitor that “neutral rates are reflecting crisis headwinds, but we’re closer to targets as higher stock prices assist spending”. If you can extrapolate any logic at all from that statement, I suspect you may be either delusional, or just plain precocious. My own deconstruction runs as follows:
- Define neutral.
- which particular crisis?
- what targets?
- how do stock prices encourage consumer spending?
But CMT research nevertheless confirmed that ‘a further hike after the June 14th meeting now has an implied probability of 50.2%’. Or put another way, the markets are almost perfectly split between those who think yes and those who think no. Next time I’m at the racecourse, I think I’ll ask the bookies what the chances are for an implied evens bet on Loppylugs in the 3.30.
I am left falling back on The Slog’s infamously cynical view of IABATO when it comes to élite pronouncements: It’s all bollocks and that’s official.