Federal Reserve Chairman Janet Yellen speech highlights on August 26, 2016 at Jackson Hole

Topic of the speech was The Fed's monetary policy toolkit

  • Case for interest rate increase has strengthened in recent months
  • Economyc nearing Fed's employment and inflation goals
  • Our ability to predict Fed rate path is quite limited

Dollar jumps on the headlines.

  • Gradual hikes over time are 'appropriate'
  • Fed expects inflation to rise to 2% goal in next few years
  • Fed depends on data, not on a preset course
  • Range of possible rate hikes paths is wide, shocks could change path

The headline is much less dramatic than the full text. The 'has strengthened' line is surrounded by caveats and talk of gradual moves.

What might be more notable is more longer-term comments on what the Fed could do if/when the next crisis or recession hits.