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Commenting on the US economic and monetary policy, Fed’s  Board of Governor  Lael Brainard  who’s stance in monetary policy is neutral who has previously said  that gradual rate hikes are “appropriate in the near term”; will increasingly depend on evolving US outlook, and has highlighted a data dependent approach, has crossed the wires today saying:

  • Rising economy risks argue for softer Fed rate path;
  • policy goal now is to preserve progress made on maximum employment, target inflation;
  • best way to safeguard gains is to navigate cautiously on rates;
  • downside risks to output, employment argue for softer rate path even if economic outlook stays the same;
  • demand appears to have softened against backdrop of greater downside risks;
  • ‘prudence counsels a period of watchful waiting,’ especially with no signs of inflation pickup;
  • economy might warrant a softening in Fed’s policy path;
  • with balance sheet normalization well advanced, should wind down redemptions later this year;
  • would not want to cut rates and shrink balance sheet at the same time;
  • inflation trends may be below the committee’s objective;
  • we should be equally attentive to the risk of downside erosion in inflation expectations;
  • trade disputes, Brexit, u.S. Government debt ceiling among risks to forecast;
  • closely watching labor market indicators, including February payrolls…

More to come…

There will be a Q/A session as well.

This will be the last of Fed speakers for the Board of Governor  before Fed’s Chairman Powell on Friday which wraps-up communications with the public before the blackout period commencing at the end of the week.  

About  Lael Brainard  

Lael Brainard  took office as a member of the Board of Governors of the Federal Reserve System on June 16, 2014, to fill an unexpired term ending January 31, 2026 took office as a member of the Board of Governors of the Federal Reserve System on June 16, 2014, to fill an unexpired term ending January 31, 2026.