While investors have evinced less angst about Yellen taking over than they did when Bernanke succeeded Greenspan in 2006 or when Greenspan stepped in for Paul Volcker in 1987, “the markets will always test the mettle of a new Fed chairman in one way or another,” former Fed No. 2 official Alan Blinder said.
Cecchetti agreed with Yellen that there aren’t many signs now of dangerous financial imbalances. Yet that’s not a reason to sound the all-clear.
“We’re into the sixth year of zero interest rates,” he said. “You do worry that there’s got to be something going on that maybe you’re missing.”