In her speech last week at a college graduation ceremony, Chair Yellen did not directly comment on the economic outlook or monetary policy but offered her views on the labor market for recent college graduates. She noted that, “while I expect workers will continue to face some challenges in the coming years…job prospects and career opportunities for new graduates at this time are very good.” She cited the low unemployment rate, steady job creation, and low layoff rates. But she warned that the economy “is growing more slowly than in past recoveries, and productivity growth, which is a major influence on wages, has been disappointing.” There was nothing surprising in this assessment. Just the facts!
President Williams gave a detailed interview to the New York Times last week. In response to a question on whether the decision to hike at the December meeting was predicated on assumptions about future stimulus, he said that his support was “based wholly on the data we have seen and thebasic economic outlook over the next couple of years.” He also noted that “the possibility of greater fiscal stimulus and other changes in policies would if anything move those risks a little bit to the right.” But he also pointed out fiscal stimulus at this stage of the recovery “should be focused on improving the longer-run performance of the economy.”