Just after the British members of parliament turned down all the eight Brexit indicative proposals, a Fed member Esther George was on wires while speaking at an event hosted by the Money Marketeers of New York University.
Reuters report that the president of the Federal Reserve Bank of Kansas City favored the US Federal Reserve’s wait and see approach while noting downside risks to the economy.
Important points from the speech: (Source: Reuters)
- Over the medium term, I see the biggest risk coming from slower growth abroad, particularly in China, the euro area, and the United Kingdom.
- US economy’s fundamentals still appeared sound.
- Job growth would likely rebound from a weak performance in February.
- Downside risks are notable however as my outlook calls for growth to slow to trend, with moderating job gains and low inflation.
- In these circumstances, monetary policy can take a wait-and-see approach.
- It might be reasonable for the Fed to allow “even somewhat persistent” deviations from its 2 percent inflation target. “If they are limited to, say 50 basis points above or below the objective (they) may be acceptable, depending on broader economic conditions”.
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