Fed: What did Fed officials say about the US economy and monetary policy this week

This is the summary of the most important headlines from the Federal Reserve officials’ speeches:

The Federal Reserve Governor Michelle Bowman said in a speech on February 11:

• She is comfortable with the current stance of monetary policy.
• The US economy is in a good place.
• I continue to see great jobs numbers and solid wage growth.
• Fed’s policy is in a good place.

The Federal Reserve Chairman Jerome Powell said in a speech on February 12:

• Powell said he does not feel the probability of recession is at all elevated.
• Fiscal policy is more powerful, immediate than monetary policy.
• The US unemployment is close to a 50 year low.
• The US economy is good, but many groups are not experiencing prosperity yet.
• The US national-level data say the economy is good.

Cleveland Federal Reserve President and the non-voting member of the rate-setting FOMC Loretta Mester said on February 13:

• Plans will be finalized for ending balance sheet runoff and completing balance sheet normalization at coming meetings.
• “We plan to continue to use our current operating framework for implementing monetary policy.”
• Fed balance sheet will be larger than it was before the 2008 financial crisis.
• Fed will make balance sheet plans and rationale known to the public in a timely way.
• The US economy will maintain good performance in 2019, though growth will slow.
• The US economy will make up 1st-quarter slowdown provided the US avoids the government shutdown.
• US inflation is likely to move below 2% in the first part of the year due to lower energy prices, but trend inflation essentially at Fed target.
• Monetary policy does not appear far behind or ahead of the curve.
• The US economy is probably a bit beyond maximum employment.
• Fed balance sheet roll-off has been gradual, not causing problems in markets.
• Mester said she has not changed her baseline forecast much.
• “We don’t have evidence of strong inflation pressures.”
• “We’re getting close to the neutral interest rate.”

Kansas City Federal Reserve President and the voting member of the rate-setting FOMC Esther George said on February 13:

• My support for pausing interest rate hikes was to let Fed assess the impact of past hikes.