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The Federal Reserve will need to run a very accommodative monetary policy for an extended period of time, Dallas Fed President Robert Kaplan said on Wednesday.

Key takeaways

“The Fed will do what it needs to do in terms of accommodation to stimulate growth.”

“The Fed is a lender; Congress and the treasury make grants, which are also important to stimulate growth, reduce the jobless rate.”

“The Fed’s lending programs are to credit-worthy companies; highly leveraged companies concerned about insolvency won’t be able to access them.”

“Loans only help to a point; fiscal policy in the form of grants will be necessary.”

“Consumer confidence will depend a lot on the availability of testing, treatment, vaccine.”

“Reducing the unemployment rate will also be critical in getting consumers willing to spend again.”

“The Fed has put off framework review for the time being.”

Market reaction

These comments had little to no impact on the USD’s valuation. As of writing, the US Dollar Index was up 0.25% on the day at 100.05.