ML-Implode News - Yellen Says Rate-Hike Case â€˜Has Strengthened in Recent Months'

"In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months," she said in the text of a speech Friday to central bankers and economists in Jackson Hole, Wyoming.
She also said the economy is "nearing" the Fed's goals of full employment and stable prices. The Fed chair didn't discuss the specific timing of a rate move in her first public comments since June.

It's pretty clear that Yellen wants to re-claim some of the Fed's "ammunition" to be able to respond to the next (coming soon) crisis. However, the Fed has rewired the central banking system so that the Fed funds market is now almost completely bypassed, rendering any such "aid" the Fed could offer by lowering rates (or, "tightening" due to raising them) nearly meaningless -- more a matter of "perception management". The only real constraint or impact is the exchange rate impact of nominally higher or lower dollar rates. And ultimately, the Fed is constrained not to step too far out of line of the global pack, or risk too much dollar appreciation.

Relevant:

Yellen Says Rate-Hike Case â€˜Has Strengthened in Recent Months'