Mary Daly, the president of San Francisco Fed signalled that the Federal Reserve is ready to raise rates if inflation will become a problem again. Here are the highlights from her speech, and also from Fed Hammack, Cleveland Fed president remarks:
Daly
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Open account Try demo Download mobile app Download mobile app- The Fed's previous framework was aimed to confirm that 2% inflation wasn't a cap and to underscore that the Fed won't fight a healthy labor market if inflation is subdued.
- We are ready to raise rates if inflation breaks out again.
Hammack
- I am very focused on housing and real estate issues. Housing inflation is going to take a lot longer to come down.
- Consumers are really supporting the economy, household balance sheets are solid. The US economy is strong, and the labor market is pretty healthy.
- Setting monetary policy is independent of the national debt. The US debt seems to be on an unsustainable path of growth.
- It is too soon to say what impact the proposed tariffs would have. Labor market has become better balanced. The Fed has more work to do to cool inflation.
- The economy is strong, labor market is healthy. I expect solid growth, low unemployment, and gradual inflation ebbing.
- Data will drive what Fed does with monetary policy. Slowing pace of rate cuts allows the Fed time to sound the economy.
- Monetary policy is likely somewhat restrictive. Fed at or near time to slow pace of rate cuts. The economic landscape calls for modestly restrictive monetary policy.
- I have an open mind about the December FOMC meeting, more data is incoming. The market view of one cut between now and late January is reasonable.
Today, US central bankers speeches are mostly hawkish, compared to markets sentiments. EURUSD loses 0.3%.
Source: xStation5
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