In a speech at a university housing symposium today, Berkeley’s very own Janet Yellen descended from the marble vaults of the S.F. Fed to bequeath upon us an ominous portend of the oncoming economic meltdown. Yellen, a steel-willed ball-buster disguised as a wispy old lady, has served as the president and CEO of the S.F. Federal Reserve Bank since 2004. In her speech, she remarked that the Fed Reserve may whittle away at the benchmark interest rate, which currently stands at a piddling 1 percent. That’s after the Fed cut the interest rate yesterday for the sixth time this year.

In layman’s terms, cutting the interest rate is supposed to stimulate consumer spending. By lowering the rate, the Fed would be making it less expensive for consumers to borrow money, which would in turn make it easier for them to splurge on things that Americans like to splurge on, like small dogs that go yip and big cars that go vroom.

The government, Yellen said, should provide assistance to homeowners and the housing market, since the housing crisis was one of the main factors that tipped off the snowball’s merry descent into hell earlier this year.

Taking questions from the audience, Yellen also commented that she finds recent data on the economy to be “deeply worrisome”, and that a significant contraction of the economy is impending. That’s something we don’t need a Fed president to tell us, thank you very much.

Image Source: straightedge under Creative Commons
Yellen Says Fed May Cut Main Rate Close to Zero in Weak Economy [Bloomberg]



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