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Federal Reserve’s Vice Chairman Richard Clarida said on Thursday he disagrees with the view  that fiscal support this year poses a long-term upward risk to inflation, as reported by Reuters.

Additional takeaways

“There is slack in the economy, and over time impact of the package will diminish.”

“Monetary policy is not worried about wage inflation; our mandate is price inflation.”

“Productivity growth can generate wage growth without generating unwanted price inflation.”

“Asset valuations, liquidity, capital, and leverage are broadly consistent with the  baseline view of robust recovery, fiscal support.”

“Fed does not want SLR over time to be an impediment to growth.”

“Will be focused intently over the next several months on how to refine, recalibrate SLR.”

Market reaction

These comments don’t seem to be having a significant impact on market sentiment. As of writing, the S&P 500 Index was down 0.55% on the day at 3,867.