I was sent an article in the NY Times that recaps Yellen’s first year as the Chairwoman of Federal Reserve and more specifically the Federal Open Market Committee, the committee responsible for the conduct of monetary policy.

The article’s theme is basically “steady as she goes,” with which I don’t have much a disagreement. My only real quibble with the theme of the article is a question about whether “steady as she goes” is what the economy has needed. We could have benefited from something different than more of the same.

But this is just beginning of my quibble. The article describes Yellen as continuing the course for policy that was set out by per predecessor, Chairman Bernanke,  over the last year and she will start arranging policy to leave her own mark next year:

But both Fed officials and outside experts say that Ms. Yellen is likely to more distinctly define her own approach next year as the Fed picks its moment to start raising its benchmark interest rate for the first time in almost a decade.

As I recall, the 2% PCE inflation target was rolled out with much fanfare in early 2012 as if some great victory had been won. Though I don’t agree with inflation targeting, I wonder about how an article could be written with an amorous tone when the PCE measure of inflation has drifted farther away from the target in the last year amid official chatter of raising the Fed Funds rate as if results measured against the Fed’s own defined yardstick do not matter. The death of outrage in the press over the Fed’s poor performance  is a rather fascinating predicament.

Peter Ireland, a professor of economics at Boston College, says Ms. Yellen has gotten the policy just about right. “I think she deserves credit for resisting pressures to overreact on both sides,” he said. He noted that Ms. Yellen had correctly judged that a rough first quarter was an aberration caused by cold weather. More recently, he said he agreed with the Fed’s judgment that inflation was likely to increase if the economy continued to grow.

Inflation is likely to increase if the economy continues to grow. So what? With the PCE measure of inflation sub-1.5% and going lower, what is the FF rate increase chatter all about? Did the Fed move the inflation goal posts to 1% without telling anyone? If so, that should be of public concern regarding the Fed’s legislated mandates. Why are we settling for less when we could have more growth that we can certainly use – and why is the press trying sell the case for settling with less?

The one thing I have been waiting for is for a financial reporter to pin one of these Fed monkeys down and ask about the inflation target. What does it mean to set an inflation target and not actively attempt to hit it? Why do they want to raise rates when they haven’t hit their target and aren’t forecast to hit it under conditions of the status quo for a few more years? In effect, ask why they aren’t doing their job as they themselves have defined it. Inquiring minds want to know.

The bottom line is: If Fed officials say a 2% inflation target is best for the economy and then do something much less than that, they should at least have to explain it. These are public officials and no other public officials get to just go and do what they want without accountability because it is generally viewed as subversive if not downright harmful to society in general. But the Fed seems to get a pass over such a sensitive topic as economic policy. I don’t get it.

By the way, David Beckworth has a new post regarding the Fed’s dirty little secret – plans to clip the base starting now, meaning that QE was a temporary injection. Match that against plans for a higher FF rate and it seems like Japan really isn’t quite as far from the US as previously thought.

HP: Marcus Nunes

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