Yellen says cryptocurrencies such as bitcoin lack stability and are not efficient for payments

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Janet Yellen, as the former head of the United States central bank, the Federal Reserve, rued the fact that cryptos such as Bitcoins could not yet be used for everyday transactions as they lacked stable source value and were largely inefficient in processing payments.

Additionally, she overruled the poor stock market performance in October and instead forecast that the present conditions were “excellently, excellent” quoting the 3.7% unemployment rate in 50 years as the cause for such confidence in the current market forces.

 

In an interview with a Canadian fin tech event, the former Fed Reserve head stated,

“I think strong growth in the United States is supporting the global economy, although perhaps the global economy, the emerging markets, is beginning to feel some pressures.” 

 

Strong fundamentals in US markets

The underlying facts which Yellen appeared to communicate regarding US market performance were all positive – highlighting strong labor market of 2%, 3% gross domestic products.

Madam Yellen was referring to the latest gross domestic product which beat market expectation and also posted a resounding and unexpected growth of 3.5%.

Though inherent risks were part of the outlook, she reiterated that there were sharp elements of balance as well.

The ex-financial regulator concluded that the results coming in on the economic indicators are a fact of 2019 as a strong year.

 

Concerned about Monetary Policy

The reason to worry, if ever about US market conditions is the latest monetary policy – on a rate above 2%, a strong labor market, and 3% growth in the gross domestic product.

“I think strong growth in the United States is supporting the global economy, although perhaps the global economy, the emerging markets, is beginning to feel some pressures,” 

Fed Reserve policies are a far cry from the no-change days with Yellen at the helm. In less than a year after her exit, the Fed has apparently tweaked prices by over three times, including a fourth hike likely to be announced in December, Yellen proposed.

 

The former Fed chairperson added that,

Nothing should ever be locked in stone, and things can happen. My presumption going into December is that a rate increase is appropriate, but I would watch very carefully and maintain an open mind.”

 

However, the risks that Yellen has identified are – deflating current economic expansion – financial imbalances, errors in federal policies stating that,

“Economic expansions don’t die of old age, and there are two things that tend to kill them off: one is the Fed, and the second is financial imbalances.” 

 

Future is well scoped

If there was one point which Yellen did not tire from reiterating was the tariffs by President Trump on China. Yellen categorically dismissed the move by the businessman-President, dismissing the move as short of foresight and will not be sufficient to recreate or bring back jobs which may of the local citizens failed to hold down.

The former fiat-currency custodian did indicate disappointment that cryptocurrencies such as bitcoin are yet to stabilize.

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