It has finally arrived, the moment where Fed Chair Janet Yellen shows she has the stuff, the language stuff, which is not surprising given that as Vice Chair under Bernanke she was leading the effort to figure out how the Fed should communicate with the rest of the word. And the answer is, as it always has, as confusingly as possible.
The moment came when after noting that "patient" had been removed from the FOMC's officially written communication, this did not mean "that the Fed has become impatient." The markets had been roiling and boiling, but this Greenspanish remark quickly calmed them. Confusion reigns and all is well.
Yellen plays the dialectical tension between openness and opacity better than any Fed Chair yet. Of course, in the ancient of days, the Fed made its decisions secretly and that was that. Nobody complained, or not too loudly or effectively or only occasionally. But then, in the 1970s it came to pass that Congress made Fed Chairs testify periodically on what they were up to, although FOMC meetings continued to be secret with only delayed reports of what they were up to. Arthur Burns in his testimonies to Congress would assist his obfuscations by smoking a gnarled pipe, which, with his Hoover era appearence, would make him positively owlish as he would disappear into clouds of smoke. For Volcker, it was massive cigars that would accompany his massive frame, but the disappearence into smoke would provide the appropriate hint of wizadry, as if Fed Chairs were really Tolkien wizards arguing over golden rings of power, if not over gold itself, long shorn of its divine authority that it had from the days of Egyptian pharaohs when its yellow colar and inertness supposedly represented the eternal sunshine associated with Pharaonic divinity.
Since then the thrust has been for ever more openness and instant press conferences, not to mention the disappearance of smoke, even the cigarettes of Greenspan, although he perfected the language of obfuscation that led to not needing the smoke, if still perhaps the mirrors. Bernanke never could quite measure up to the Greenspanianly eloquent incoherence, although he learned quickly to avoid rattling the markets with overly open remarks about hard facts. But, with this performance, Janet Yellen shows she has transcended Bernanke, and may have even shown how to be obfuscatory and brief all at the same time, thus achieving a truly dialectical synthesis between openness and opacity.