'Janet Yellen’s Unusual Optimism'

Teresa Tritch of the NY Times editorial board:

Janet Yellen’s Unusual Optimism: ...To my ears, most of Ms. Yellen’s speech expertly laid out why the economy is not ready for interest rate increases anytime soon. Then, toward the end, she said that based on her views, she expected to begin raising rates “at some point later this year.” ...

Granted, it takes time for the effects of an interest-rate move to be felt in the economy. So if the Fed thinks the economy is going to start overheating, say, next year, it would choose to raise rates before that. But I didn’t hear any good reason in the speech to believe that a full-steam-ahead economy lies ahead. ...

And yet, Ms. Yellen’s take is that a gradual process of steady improvement is underway that, if continued, could justify the start of rate hikes this year.

That is guarded optimism. But six years into an economic recovery that has been consistently disappointing, I find it hard to share even guarded optimism. ...

Ms. Yellen stressed, as she always does, that actual economic developments in coming months would determine when to begin raising rates. The question is whether more of the same fitful, inconclusive growth will count as reason to act or reason to wait.