As if there was any doubt that the Federal Reserve is a political beast, Chairwoman Janet Yellen confirmed it with these comments: “Jermaine Brownlee was an apprentice plumber and skilled construction worker when the recession hit, and he saw his wages drop sharply as he scrambled for odd jobs and temporary work. He is doing better now but still working for a lower wage than he earned before the recession.” Well if the Federal Reserve had kept rates at a normalized level through the good and bad times then we wouldn’t have this stop and go economy/real estate market. Someone in Washington has Yellen’s ear about creating more jobs. Instead her focus should simply be on sound money policies. Take a look at this chart. It’s the spread between the 10-year Treasury and the Federal Funds rate. There’s plenty of room for the Fed to tighten and satisfy Yellen’s concern about mortgage rates.
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