Modestly accommodative

So Yellen just said monetary policy is modestly accommodative. I am not a huge fan of accommodative because it (intentionally) does not mean anything. But modesty communicates the reality, I think, and I think they think.

Consider the last substantive paragraph in the Press Release, though:

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee’s holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

So QE is providing accommodation. But the overall thrust is only “modestly accommodative?” I guess that must mean a funds rate near 37.5 bps is itself tight.

ALTERNATIVELY, they don’t really believe that nonsense about QE. That would be my guess.

I don’t mind that they lie fib in the national interest. I juts find it funny how gullible the Fed watching community is.