Recent statements from Fed officials
This is a summary of recent statements from Fed officials:
St. Louis Federal Reserve President James Bullard and a voting FOMC member said for the Wall Street Journal on January 9:
- We’ve got a good level of the policy rate today.
- There’s no urgent need to go higher.
Atlanta Federal Reserve President Raphael Bostic and a non-voting FOMC member said on January 9:
- Business contacts indicate firms are becoming defensive in planning for a slowdown, holding off on investment plans.
- Likely slowing growth in 2019 is not the result of fundamental weakness in the economy, but return to trends driven by slow growth in the labor force.
- Message from markets is that both main street and Wall Street are concerned about risks to growth.
- Fed needs to be patient and seek "greater clarity" on economic risks as it mulls further rate increases.
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.