Although we work through financial markets, our goal is to help Main Street, not Wall Street.
Janet YellenRead
We need to keep in mind the well-established fact that the full effects of monetary policy are felt only after long lags. This means that policy makers cannot wait until they have achieved their objectives to begin adjusting policy.
Interpretation
What this quote means
Monetary policy effects take time to manifest, so adjustments must be proactive.
Janet Yellen emphasizes the importance of timely action in monetary policy. This quote highlights that the effects of policy changes are not immediate; therefore, policymakers must anticipate future conditions and make adjustments before objectives are fully realized to effectively manage the economy.
Themes
Monetary PolicyEconomyTimelinessPolicy AdjustmentLagging Effects
In practice
Example use cases
In a speech addressing economic strategy, a policymaker might use the quote to illustrate the importance of proactive monetary policy.
More from Janet Yellen
All quotes →A clear lesson of history is that a 'sine qua non' for sustained economic recovery following a financial crisis is a thoroughgoing repair of the financial system.
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Transparency concerning the Federal Reserve's conduct of monetary policy is desirable because better public understanding enhances the effectiveness of policy. More important, however, is that transparent communications reflect the Federal Reserve's commitment to accountability within our democratic system of government.
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For decades, the pace of technological change in manufacturing has outstripped that in the economy as a whole. And, so, firms - manufacturing firms - have found it easier to continue producing by - with - reducing their workforces.
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Inequality has risen to the point that it seems to me worthwhile for the U.S. to seriously consider taking the risk of making our economy more rewarding for more of the people.
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In government institutions and in teaching, you need to inspire confidence. To achieve credibility, you have to very clearly explain what you are doing and why. The same principles apply to businesses.
Janet YellenRead
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