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“It is true low rates support equity valuations,” Federal Reserve’s Vice Chairman Richard Clarida said on Friday but added that low rates also support unemployment and other key economic factors, per Reuters.

Additional takeaways

“Fed in past has relied too much on one measure of the job market in its focus on the unemployment rate.”

“What we found before the pandemic is the US economy can run at a much lower level of unemployment without stoking inflation.”

“Likely to be at effective lower bound for some more years to come.”

“We are doing a version of lower for longer.”

“We are not going to preemptively raise rates because a model suggests the unemployment rate is too low.”

“In terms of our reaction function, the new framework is simpler than under previous policy regime.”

“Level of banking reserves has surged, reflects balance sheet expansion.”

“Reserves are well above ample at these levels.”

Market reaction

These comments don’t seem to be having an impact on market sentiment. As of writing, the S&P 500 Index was up 0.17% on a daily basis at 3,810.