This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Yellen's Denials About Inflation Will Curb Fed's Independence

NEW YORK ( TheStreet) -- Testifying before the Senate Banking Committee this week, Federal Reserve Chairwoman Janet Yellen cherry-picked data on inflation by noting prices are up less than the Fed's target of 2%.

The Labor Department's consumer price index has accelerated since March and was up 4.2% in May.

On Tuesday, it will release June data, and although the numbers may not be quite so high, they likely will show inflation continued above 3%. Once inflation gets out of control, history has shown it is difficult to contain without a steep and painful recession.

Congress recognizes these dangers, and Yellen's cognitive dissonance will add new life to legislative proposals to rein in the Fed's independence.

Why Is USO -- the Oil ETF -- Outperforming the Price of Oil?

Buy U.S. Bonds and Europeans Stocks for the Second Half of 2014

eBay Is Smartly Treating StubHub Like Uber

A bill under consideration would require the Fed to submit to Congress a detailed strategy or rule for the Fed's policy instruments -- for example, targets for money supply growth, lending rates to banks, etc. -- and essentially handcuff quick Fed responses to emerging crises.

The Dodd-Frank legislation was intended both to curb destabilizing practices on Wall Street and to permit the Fed to better respond to crises -- for example, the 2008 Lehman Brothers collapse, which in the absence of Fed intervention caused the house of cards that was mortgage backed securities to collapse and ignited the worst financial crisis since the Great Depression.

The Fed's credibility is already suffering greatly from the ill-considered actions of former Chairman Ben Bernanke and former Treasury Secretary Timothy Geithner. Together, they bailed out the biggest financial firms, but largely left top officials, with the exceptions of those seized by the federal government, to continue to find creative ways to gamble and pay themselves outlandish bonuses.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $118.03 -0.71%
FB $105.41 -0.31%
GOOG $748.15 -0.02%
TSLA $229.64 5.22%
YHOO $33.16 0.61%


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs