Federal Reserve’s Mester crossed the wires, via Reuters, noting that recent market moves don’t change US outlook, although she added that risks exist.
Headlines
Expects US. economy to overcome market turbulence and regain footing
Recent market moves do not change US outlook but there are risks
Only a steeper, longer drop in stocks could dampen US economic outlook
US economy ‘solid’ due to healthy jobs and income growth
Expects labor market improvement, lower unemployment this year
Oil drop means lower US inflation for longer than previously thought
Says might take longer to hit 2 pct inflation target
Surprisingly high oil production means lower oil for longer
Federal Reserve policy now well-calibrated to risks
Expects rates to rise gradually over time
Job growth is strong enough to lower the US jobless rate
Still sees gradual rate rises as appropriate
I haven’t seen enough to change my modal outlook
Asked about earlier plans for 4 rate hikes this year, says has not changed US outlook
I like that we are” gradually raising rates, but would respond to slowdown
Skeptical of negative interest rates in the US
Likely not that effective
End portfolio reinvestments only after rates up to 1 pct or so
Policy will not reflect market expectations, which are apt to move
Does not want to take action that would be ‘shocking’ to markets
Federal Reserve should not be a mirror to financial markets
Shrinking balance sheets removes policy accommodation
(Market News Provided by FXstreet)
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