Morning Must-Read: Tim Duy: One For the Doves

**Tim Duy:** One For the Doves – Tim Duy’s Fed Watch: “this [employment] report fits nicely with the view…

outlined by Federal Reserve Chair Janet Yellen earlier this week.  The labor market continues to improve at a moderate pace, a pace that remains insufficient to rapidly alleviate the issues of underemployment and low wage growth…. I think the real policy question should be: “why is the Fed engaged in reducing policy accommodation in the first place?” If Yellen is as concerned about the plight of labor as she purports to be, and if she and her colleagues are as committed to the 2% inflation target as they purport to be, then it seems like there is a strong argument for slowing the pace of the taper and using a rules based approach to take the risk of earlier-than-anticipated rate hikes off the table. In short, there seems to be a disconnect between the Fed’s rhetoric and the general policy direction.  They seem to have lost interest in speeding the pace of the recovery.