The Federal Reserve’s Vice Chairman Richard Clarida has recently crossed the wires arguing that gradual rate hikes were appropriate “as data shows the way to neutral policy stance.”
Key quotes (via Reuters)
- Policy rate currently ‘just below’ Fed’s longer-run neutral estimates.
- Proximity to neutral policy ‘a matter of judgment’; FOMC has ‘range of views’.
- Uncertainty around neutral policy, maximum unemployment highlights need for data-dependency.
- Policy should aim to sustain US growth, achieve dual mandate.
- Risks now more symmetric, less skewed to downside than in past.
- Expects inflation to remain anchored; watching for signs of weakness.
- Would back more rate hikes than expected if inflation surprised to upside.
- US economic fundamentals ‘robust’, GDP growth ‘strong’.
- Expects US growth at least well into 2019.
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