Comments from Brainard:
- Recent risks have brought important downside risks for US economy, including policy uncertainty
- Recent US inflation indicators have been disappointing, making it important to sustain momentum
- Most likely path for the US economy remains solid
- The latest data suggest that consumer spending is robust, and consumer confidence is high
- Downside risks could weigh on US economy
- Low inflation expectations can create a self-fulfilling dynamic
- US financial conditions remain supportive
- Full text
I agree with everything Brainard writes here, the problem is that all of this was equally true in December, when the Fed was hiking.
Quotable:
"Basic principles of risk management in a low neutral rate environment with compressed conventional policy space would argue for softening the expected path of policy when risks shift to the downside."
