Recent statements from the Fed officials

Recent statements from the US Federal Reserve Bank officials:

Atlanta Federal Reserve President Raphael Bostic and a non-voting FOMC member said on January 7:

• “I am at one move for 2019,” Bostic said commenting on interest rates outlook.
• The US economy looks “pretty solid”.
• Market volatility attributed to uncertainty over trade policy and global economic “clouds”.
• The US government shutdown to have a small aggregate impact on the economy if it stays short.

The Federal Reserve Chairman Jerome Powell said at the panel discussion in Atlanta on January 4:

• Incoming data says economic momentum remains solid heading into 2019.
• Data does not raise concerns about too strong inflation.
• Powell sees strength in consumer spending, other data.
• The US data overall seems on track to sustain good momentum.
• China data does show softening in demand, but Chinese authorities are responding and the country should still expand.
• Fed policy is not on a preset path, particularly with muted inflation.
• Fed will be patient in watching incoming economic data and stands ready to adjust policy, as the Fed did in 2016 when financial markets tightened.
• Pawell said he does not feel balance sheet reduction is an important part of market turbulence.
• If the Fed concludes that its balance sheet reduction is causing problems in markets it will revisit its plan.

Cleveland Federal Reserve President Loretta Mester and a non-voting FOMC member said on January 4:

• If inflation doesn’t rise, FED could stop hikes.
• We don't see inflation accelerating.
• I don't have to vote today and want to take the time to evaluate the economy.
• I don't perceive the economy going into recession.
• The economy will guide rate decision.
• On the Fed balance sheet, Mester said that if the economy deteriorates we can change the balance sheet policy.
• One or two rate hikes is about where we're seeing the economy now.

Dallas Federal Reserve President Robert Kaplan and a non-voting FOMC member said for Bloomberg on January 3:

• Fed must be "very vigilant" about how its QE unwind is impacting markets and the economy...and be ready to "make adjustments" to its plans when needed.
• Kaplan cites three reasons for pausing interest rate hiking: slowing global growth saying that the US likely won't be immune to a slowdown in China and elsewhere, weakness in interest-rate sensitive industries, and notably tighter financial conditions.