Every Janet Yellen Speech Summarized, Using Zebras

For many, everything coming from the Federal Reserve is confusing. The rhetoric itself, "Fedspeak," can be overwhelming, and media outlets' reports on the happenings are often fueled by speculation.

As explained by the Wall Street Journal, despite the oft-convoluted language, the Fed statements are important for investors and pundits alike, "The Federal Reserve releases a statement at the conclusion of each of its policy-setting meetings, outlining the central bank's economic outlook and the actions it plans to take place. Pundits and traders parse the changes between statements closely to see how policy makers' views are evolving."

In light of the upcoming June 14–15 FOMC meeting, it seems only appropriate to look briefly into the rhetoric used by Federal Reserve Chair Janet Yellen and the statement published April 27, 2016.

Related Link: Economists Mixed On Yellen's Speech

Contrasting the previous month's statement, the April statement highlighted labor market conditions as having "improved further even as growth in economic activity appears to have slowed." Additional emphasis was given to household spending growth (it's moderated, while income remains high), while the omission of a comment regarding global economic and financial developments could be interpreted as a change in the global landscape as a whole.

Let's Break It Down

Reddit user FantasticBabyyy humorously summarized and simplified Janet Yellen's speeches by replacing the "Fedspeak" with an extended zebra analogy.

Yellen: The zebra is an animal. Its skin is white, on some spots. And on others, it is black. Sometimes, people say there is white more than black, but others say there is black more than white. In consideration of that, if it is black or white, I will say both. And consider other factors involved. New questions and considerations will be taken into account. But in the future, we will know the color, perhaps it is black and white, but my colleagues and I, we will take all consideration moving forward. We will make gradual and further investigation going forward and take into account every appropriate data and incoming information available.*

Users responded enthusiastically to the summary, with one commenting, "The interesting thing about Fedspeak is that it's mostly journalists reading the statements and making their own conclusions that are filled with speculation. It's as if the Fed wants the media to make statements for them so that they're shielded from blame and they can easily go back on their word and simply say everyone interpreted them wrong."

Another user responded, "Great stuff! Nice to know the WSJ posts the comparison."

Suggesting an edit to the analogy, another user added, "'We will also arbitrarily narrow and/or broaden our investigation so that the Committee can be satisfied with available results and analysis in determining when it is appropriate to decide on the color of a zebra…'"

What's Been Said Recently

As the meeting looms ahead, news outlets are in fact mulling over the recent comments made by Yellen. CBS News, for instance, quoted Hugh Johnson of Hugh Johnson Advisors as stating, "'I think those rumblings are unfounded. I think she's been abundantly clear,' Johnson said, referring to Yellen's frequently repeated refrain that Fed moves are data-dependent."

Yellen recently stated, "The best we can legitimately do is explain what factors are guiding our thinking."

So, how black and white will this next meeting be? Tune in to find out Tuesday and Wednesday.

*Original post has been edited for clarity.