The coronavirus is the driver of the US economy right now, Kansas City Federal Reserve Bank President Esther George said on Tuesday, as reported by Reuters.
Additional takeaways
“The outlook is pretty optimistic for the second half of the year; risks include logistics around vaccination program.”
“Fiscal policy will remain important to US economic activity until the virus is in the rearview mirror.”
“It’s clear that the mix of mortgage securities and treasuries will continue until the economy is through this critical phase.”
“Debate over bond purchases will commence when it is clear Fed is on track to meet its inflation and employment goals.”
“To the extent, economic optimism is behind rising in long-term bond yields it is consistent with the Fed policy.”
“Rise in long-term yields so far is not concerning and does not reflect tightened financial conditions.”
“Policymakers will have to deal with long-term implications of federal debt at some point, but right now the economy needs a bridge to get past the health crisis.”
“Not seeing a near term inflation problem.”
“Fed would look to broad-based, persistent price pressures, not one-time increases in particular industries.”
“If minimum wage increase comes to pass remains to be seen if it would be passed through to higher prices.”
“Small businesses saying concerned about the impact of higher minimum wage on margins.”
“Vital to bring workers to the jobs that exist in the future, finding ways for workers to retool, companies to attract employees to in-demand occupations.”
Market reaction
The US Dollar Index showed no immediate reaction to these remarks and was last seen posting small daily gains at 90.52.
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