A hint on 'the last mile' from Janet Yellen could be an important one

<p>If the Fed didn't have groupthink, it wouldn't have any thought at all.</p><p> That's why I noted a comment from former Fed Chair Janet Yellen today.</p><p>She spoke with the WSJ's Nick Timiraos and inflation was a main topic. She was pointedly asked about the ongoing debate in markets, which is the fear that inflation falls to around 3% but that it proves tough to 'complete the job' and get it all the way to 2%. This is something that Powell has fretted about in the past.</p><p>Yellen said that inflation is "certainly meaningfully coming down. And I see no reason why inflation shouldn’t gradually decline to levels that are consistent with the Fed’s mandate… I personally don’t see any good reason to think that the last mile is going to be especially difficult."</p><p>Now, part of Yellen's job is to advocate for the White House and win the 2024 election, so she's paid to spin it positively but I strongly suspect that the vast majority of the FOMC will come around to her line of thinking (or is already there).</p><p>She was also asked about a wage-price spiral and/or high inflation expectations.</p><p>"That's low on my worry list," she said, adding that she does "see any evidence that inflation has become ingrained or that we have a wage price spiral"</p><p>Tomorrow, if Powell says that the last mile isn't going to be especially difficult, that will be cause for markets to celebrate, and sell the dollar.</p>

This article was written by Adam Button at www.forexlive.com.