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Federal Reserve Governor Lael Brainard said on Tuesday that she will be monitoring inflation data on a variety of measures, as reported by Reuters.

Additional takeaways

“Looking at measures that will patrol for outliers.”

“Will also be looking at wage inflation measures.”

“Will be carefully monitoring wage data that controls for composition effects.”

“Temporary factors are affecting inflation  but inflation is expected to move down toward target following reopening phase.”

“Sustained’ inflation at 2% is Fed’s goal; temporary factors don’t provide many signals.”

“Goal of Fed’s asset purchases is to put downward pressure on longer-term rates.”

“During the period of stress in March 2020,  the asset purchases also smoothed market functioning.”

“Composition of asset purchases reflects the pace of MBS and Treasuries from June of last year.”

“Fed has chosen to retain that composition to provide certainty over the path of purchases over time.”

“Composition of Fed’s asset purchases is effective in achieving monetary policy goal.”

“The composition is effective in achieving our goals.”

“Current situation in housing is not comparable to 2008.”

“Market participants understand Fed’s reaction function.”

Market reaction

The US Dollar Index stays flat on the day at 89.83 following these comments.