Bootstrap Confidence:
Bootstrap confidence was a term used today by Janet Yellen, the Chairwoman of the Federal Reserve while reporting to the US Congress.
Senator Robert Mendendez asked her about the chance that raising interest rates will boost confidence and thus would act as a growth catalyst. She responded:
"It's fair to say that when we begin to raise our target for the federal funds rate it will be because we're confident about the recovery and we're reasonably confident that inflation will move back toward our 2% objective over time, but that confidence will reside in real improvements that we see in the underlying conditions in households and businesses." ... "be attempting to somehow bootstrap an improvement that is purely occurring from a confidence effect that comes from our raising rates".
By bootstrapping confidence she means the Fed can't make the economy better by bluffing by raising interest rates.
Bootstrap confidence was a term used today by Janet Yellen, the Chairwoman of the Federal Reserve while reporting to the US Congress.
Senator Robert Mendendez asked her about the chance that raising interest rates will boost confidence and thus would act as a growth catalyst. She responded:
"It's fair to say that when we begin to raise our target for the federal funds rate it will be because we're confident about the recovery and we're reasonably confident that inflation will move back toward our 2% objective over time, but that confidence will reside in real improvements that we see in the underlying conditions in households and businesses." ... "be attempting to somehow bootstrap an improvement that is purely occurring from a confidence effect that comes from our raising rates".
By bootstrapping confidence she means the Fed can't make the economy better by bluffing by raising interest rates.
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