What Could Yellen Say To Move Markets During Nomination Hearings Tomorrow?

Janet Yellen's nomination hearings, which begin tomorrow at 10amET, are sure to be the usual parade of partisan back-slapping and gotchas. It is clear from leaked remarks which direction she is heading.

Bloomberg reports that the former Fed head will tell the committee that the U.S. economy has been suffering from entrenched inequality - and that the administration’s longer-term goal will be to create “more prosperity for more people.”

Well before Covid-19 infected a single American, we were living in a K-shaped economy, one where wealth built on wealth while working families fell further and further behind,” Yellen will say, according to a text of her prepared remarks obtained by Bloomberg News.

“This is especially true for people of color.”

Which, irony of ironies, has been dramatically worsened by the very organization that she herself ran...

It will be interesting to see 'explain' her way out of being first the catalyst for inequality and now the virtue-signaling queen of reparations.

Yellen will likely also toe the line made by Biden that cheap borrowing costs are an opportunity for public spending to boost the economy.

“Right now, with interest rates at historic lows, the smartest thing we can do is act big,” she’ll say, according to the prepared text.

But Yellen will likely get asked what the safe limit is, now that debt is on the verge of surpassing 100% of GDP... and what if rates go up?

However, after years of mixed messages on U.S. currency policy, and occasional outright endorsement of a weaker currency, Yellen is facing some pressure to restore the embrace of a strong dollar. But she’s also in the past highlighted the negatives from a strengthening greenback. But, the extensive advance discussion of Treasury nominee Yellen’s views on the USDollar suggests that she does not want her hearings to be market moving.

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