Bubble or Not, Don’t (Necessarily) Blame Fed

Toward the end of her Nov. 14 confirmation hearing to be the next chair of the Federal Reserve, Janet Yellen faced a question from Sen. Mike Johanns (R-Neb.) about the effect of years of easy-money policies at the Fed: “Here’s what I’m saying. . . . I think the economy has gotten used to the sugar you’ve put out there. And I just worry you’re on a sugar high.” Yellen, who has been vice chair of the central bank since 2010, was not given time to address the charge, but her prominent role in supporting such policies gives us a strong sense of her answer.

Read More