Federal Reserve Chairman Jerome Powell said at the economic club of New York on Wednesday, November 28 that:
- Powell: "close" to price stability, maximum employment mandates
- Gradual US rate hikes balance risks to forecast
- FED is balancing risks of shortening expansion, on one hand, higher inflation and instability on other
- Powell repeated that he sees "moderate" overall vulnerabilities to financial stability
- Powell expects solid US growth, low unemployment, and near-target inflation
- Powell reiterated that there is no pre-set policy path as Fed is paying "very close attention" to data
- FED working with U.S. firms to prepare for a full range of Brexit outcomes
Federal Reserve Governor Richard Clarida expressed a cautious policy outlook while speaking to bankers in New York on Tuesday, November 27. The Federal Open Market Committee's newest member emphasized the importance of policymakers’ data dependency in their approach. Key points from Clarida’s speech:
- Uncertainty around neutral policy, maximum unemployment highlights need for data-dependency
- Monetary policy should aim to sustain US growth and to achieve its dual mandate
- Risks are now more symmetric, less skewed to the downside than in past
- Clarida expects inflation to remain anchored; watching for signs of weakness
- Clarida would back more rate hikes than expected if inflation surprised to the upside
- The US economic fundamentals “robust” and GDP growth “strong“
- US labor market “robust” and wage growth picking up
St. Louis Federal Reserve President James Bullard said on Tuesday, November 27 that:
- Possible “cracks” in growth to shape FED debate in the coming year
- Bullard further said expects slower growth over the next two years, making it 'tougher' for FED to continue rate increases
- Bullard, the upcoming voter on policy in 2019, said rates already at or near the neutral level
- Bullard said the economy, jobs market otherwise strong, with only moderate financial risks
- Bullard said he does not expects low unemployment to spark inflation
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