I was with David Zervos last Friday night in Geneva. He argued rather forcefully that Yellen is a different kind of Keynesian dove and that we might see her wind down QE as we know it and then turn around and target consumer mortgages directly. This was in response to my critique that QE has been a massive transfer to the wealthy. He said Yellen would agree and that she was bothered by that, so her answer will be go straight to the middle class with the next round of QE. Interesting idea, and I can see the attraction IF you are a liberal neo-Keynesian; and thus a new worry enters my closet, in that we could see a further distortion of markets and more encouragement of risk and leverage for consumers. Can we say 50 Shades of Keynes?

Here is DZ's piece on Stan Fischer. That uber-neo-Keynesian Paul McCulley has cut his long hair and beard and is out and about again. There are several appointments that will be made on the Fed in the next 1-2 years by Obama, and you can make book they will all be in the same mold. Just saying...