Yellen Adds “Uncertainty”

The title of Yellen’s speech yesterday was changed at the last minute to include the word “uncertainty” – an extraordinary step signaling a major change in policy posture. Belatedly recognizing the tightening of financial conditions worked by too-low oil prices and China’s FX policies, and collapsing long-term inflation expectations, Yellen is effectively admitting that “liftoff” was an error. It’s one and done until the environment changes substantially.