When it comes to economics and monetary policy, the Atlantic Ocean is growing wider.
While this year's Jackson Hole meeting of central bankers was about labor markets, the differences between Europe and the United States were a much-discussed topic in the official proceedings and on the sidelines last week.
Among the questions being asked were whether Europe should and would launch a quantitative easing program, whether the Fed could engineer a smooth exit from its easy monetary policies and whether it's sustainable for the world's two biggest economies to be on different growth and policy paths, with particular concern about whether Europe would drag down the U.S.
Draghi made note of "diverging paths of U.S. and European monetary policies," and his first chart showed a widening gap in the employment data. "Unemployment in the U.S. continues to fall at more or less the same rate. In the euro area, on the other hand, it begins a second rise that does not peak until April 2013."
Yellen spent the bulk of her speech on Friday weighing the differing arguments about how much labor slack exists in the U.S. economy and how quickly it might tighten. This was in contrast to prior comments where she seemed more certain about the abundance of labor slack. Yellen's remarks raised the question: If the debate over labor slack is so even now, should policy really be quite so one-sided?
If the data come in better than expected, Yellen said, the Fed could move more quickly. She also said the Fed could move more slowly if that pace diminishes. But the evenhandedness of her remarks could lay the groundwork for a shift by Yellen to a somewhat more hawkish stance for earlier rate hikes than the market now assumes if the data continue to improve even at the current pace.
The August CNBC Fed survey pegs the average "liftoff" date at July 2015, a month earlier than the prior survey. St. Louis Fed President Jim Bullard told CNBC in Jackson Hole that he supported a spring rate hike, a position that could end up being a compromise date between hawks on the committee who want to raise rates now and doves who want to wait until next summer.