At least three Federal Reserve Boards said on Monday they were ready to pull back the stimulus without seeing the threat from inflation.
Speaking on separate promises, Federal Reserve Board of Governors Lael Brainard, John Williams of New York and Charles Evans of Chicago are all the first steps in policy tightening: markets and the economy.
“I think it’s clear that we’ve made significant progress in achieving our inflation target,” Williams told The Economic Club of New York. “We’ve made very good progress towards maximizing employment.” “Assuming the economy continues to improve, as I would expect, the easing of the pace of asset purchases may soon be justified.”
But they emphasized the move, Known as taper, Does not provide a signal about the upcoming interest rate hike.
“Forward guidance on maximum employment and average inflation sets the standard for raising policy rates much higher than slowing the pace of asset purchases,” Brenard told the National Association for Business Economics. “I would like to emphasize that the decision to announce a slowdown in asset purchases should not signal the timing of lift-offs.”
The position was in line with a statement released after the Federal Open Market Committee meeting last week.Authorities agreed “Taper may be guaranteed soon” After the meeting, Chairman Jerome Powell said he would like to end the bond purchase program of at least $ 120 billion per month by mid-2022.
Commission says current inflationary pressure Highest rate in decades,continue.
Evans even said he thinks the Fed should raise its inflation target higher than its traditional 2% target. Instead, he said it should aim for inflation “more than 2% but close to 2%.”
“I think the FOMC’s own actions and communications play an important role in curbing long-term inflation expectations,” he told the National Association for Business Economics on Monday. “Overall, I’m more worried about not producing enough inflation in 2023 and 2024 than we could live too much.”
Inflation is expected to continue to exceed 2% for “another year or so” as “pandemic-related supply and demand fluctuations gradually recede,” Williams said. But he said inflation should fall to its target at some point in the year.
In the quarterly economic outlook, FOMC members Core inflationWas 3.7% this year, excluding food and energy prices, but fell to 2.3% in 2022 and to 2.2% and 2.1% in the next two years, respectively.Officials too Probably one rate hike In 2022, followed by three in 2023 and three in 2024.
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The Federal Reserve Board says there is a setback in stimulus despite cold inflation
Source link The Federal Reserve Board says there is a setback in stimulus despite cold inflation