Janet Yellen roiled the markets last week by talking about the timing of interest-rate hikes. My latest Bloomberg column argues that the level of interest in her comments is a symptom of a problem.
The muddled communications aren’t a gaffe. They reflect a muddled policy. The markets are obsessed with every syllable Yellen utters because they’re so unsure about what the Fed is going to do. Its behavior is difficult to predict. It has acted in an ad hoc way for the past several years and has never bound itself to any rule.