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It’s important that the Federal Reserve’s policy pivots to accommodation from stabilization in the coming months, Federal Reserve Governor Lael Brainard said on Tuesday.

Additional takeaways

“US economy faces uncertainty, risks tilted to the downside.”

“Coronavirus is the most important economic factor; timing and size of fiscal support are also key.”

“New policy framework breaks ground, puts the Fed in stronger position to support recovery.”

“If the new framework had been in place several years ago, job gains would have been bigger.”

“The new framework means the Fed will not preemptively withdraw support.”

“The underlying trend of inflation is below the Fed’s 2% goal.”

“Mechanical average inflation target would be difficult to explain, implement.”

“Reviewing framework every five years can provide insight into the appropriate make-up period for inflation.”

Market reaction

The US Dollar Index edged higher following these comments and was last seen gaining 0.13% on the day at 92.28.

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