Yellen at Jackson Hole: On to September – TDS

Fed Chair Yellen's Jackson Hole speech focused entirely on financial regulation and resilience, and was silent on the economic and policy implications, explains the research team at TDS.

Key Quotes

“By failing to discuss the elephant(s) in the room—inflation and rate normalization—her comments were taken as dovish.”

“We push back on the market reaction as failing to discuss the policy outlook says nothing on how it is evolving. Moreover, we believe that incoming data and the September policy meeting will be more informative in that respect, particularly as Fed officials have increasingly stressed data dependence. From this perspective, the lack of a fundamental catalyst leaves the FX market to adopt a "trend is your friend" stance when it comes to the EUR.”