Janet Yellen vs Paul Volcker and her biggest challenge

Janet Yellen is generally viewed as über-dovish and of the same ilk, but history may force her pursue policies of more maligned hardliners such as Paul Volcker, who was vilified for his efforts to contain inflation by hiking rates. 

By historical terms, the current monetary policy is extremely loose. The start of the ‘taper’ has begun the process of tightening financial conditions,

Tough challenge ahead ?

Yellen’s biggest practical and intellectual challenge will be to unlock the mysteries of the labour market. She and her colleagues at the Federal Reserve need to decipher whether the Americans that are dropping out of the workforce is a permanent or temporary phenomenon and whether they can be ever coaxed back through policies that support economic growth.