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US inflation expectations agree with FRB price stability target = Vice Chairman Clarida

2019-09-27T03:40:37.777Z


[San Francisco 26th Reuters]-Federal Reserve (FRB) Vice Chairman Clarida said the inflation expectations were close to the FRB's target of 2% on the 26th, and no further rate cuts were needed. The idea of


[San Francisco 26th Reuters]-Federal Reserve (FRB) Vice Chairman Clarida said the inflation expectations were close to the FRB's target of 2% on the 26th, and no further rate cuts were needed. Suggested the idea of

Vice-Chair Clarida said at the meeting at the Fed Bank of San Francisco, “We have determined that US inflation expectations are in a range consistent with FRB's price stability responsibilities.”

The natural unemployment rate may be at or below 4%.

Last week, the Federal Reserve Commission (FOMC), which opened on 17-18, lowered the induction rate for the Federal Fund (FF) interest rate by 25 basis points (bp) to 1.75-2.00%.

The rate cut was the second this year following July, and Powell FRB chairman explained that he decided to cut rates as “insurance against the risks currently seen” such as the slowdown of global economic growth and increasing tensions over trade issues. .

However, the future interest rate path will be determined at each meeting, and Mr. Powell, Mr. Clarida, and several other policymakers have shown that the US economy is well supported by solid consumer spending. .

Clarida said on the 26th that the US labor market is strong, and the unemployment rate of 3.7% is within the “reasonable” range of full employment.

However, he said, “There is no evidence that wage growth is putting upward pressure on prices.” He noted that structural changes in the economy have weakened the link between easing monetary policy and inflation risk.

This point was pointed out at the panel discussion held at the conference.

While some voiced emphasizing the benefits of low interest rates in terms of correcting inequality and expanding employment, the “overheating” economy would only benefit some of the American population, and as a side effect of a strong labor market, housing costs Some pointed out that some people were forced to work on the side to cope with the rise.

“Is it easier to work in an overheated economy, or is it hindering what you are trying to achieve?”, “I want us to slow down because the trade-off is too big. I wondered if it was.

While this exchange is not a direct clue to exploring the FRB's views on current policies, President Daley suggests he does not intend to slow the overheating economy. He concluded the meeting by saying "There are real benefits."

Source: asahi

All news articles on 2019-09-27

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