Comments from Fed vice-chair Richard Clarida on October 18, 2019:
- Monetary policy is 'not on a preset course' and decisions will be made 'meeting by meeting'
- No evidence strong labor market is putting pressure on inflation
- Inflation 'remains muted'
- Treasury purchases should not be confused with QE
An Oct 30 cut was 84% priced in before before the speech and the Fed is into the blackout period tomorrow. This was the final opportunity to push back on what's priced in and they're not pushback here. They're cutting.
More comments in the Q&A:
- It's clear that growth in H2 is somewhat slower than H1
- Relative to July we have seen a downshift in overall growth
- Doesn't see any evidence that recession risks are elevated or spilling over to affect consumers
- Global economy is muddling through, situation not dire
- Positive for European outlook the ECB acted as it did
- Financial conditions are in a good place right now
- Important to anchor expected inflation at 2%
- Fed officials have a special responsibility now that unemployment is low to try to do what we can to keep it there
