Comments from the Boston Fed President on Bloomberg TV:
- We're supposed to focus on unemployment and inflation in the US
- There are costs to easing when it's unnecessary
- We have to think about financial stability concerns
- We have to think about how much we want consumers to be leveraged going into a downturn
- We're in a pretty good spot right now
- Forecasts for Q3-Q4 are at 2%, the same as now. There's no slowdown
- We obviously had a big move in markets a week ago but it's moved back up
- The solution for weakness abroad is for countries abroad to ease or use fiscal stimulus
- Low Treasury yields reflect global weakness
- The consumer is a risk in the next few corners
- It's a good time to sit back and evaluate risks, especially the consumer
- I'm certainly going to pay attention to geopolitical concerns between now and Fed meeting -- notes Brexit and Hong Kong
- The tariffs have been announced but we're not certain they will go into effect on Sept 1
- We need to see what's going to happen and how the economy reacts
- The yield curve is an important signal
- A lot of the reason that long rates have gone down is because of weak growth and low rates elsewhere
- Exports are a relatively small percentage of our economy
- Unless growth looks like it's slowing down below 2% forecast, I don't see a lot of reason to take action
- There are other reasons for why the yield curve is what it is
- Ideally we'd be seeing more fiscal expansion in foreign countries
- I'm expecting inflation to converge towards 2%
- We need to stay focused on Fed goals
- We have to be focused on how bad global conditions get
- Just because other countries are weak doesn't mean will be weak as well and doesn't mean we have to ease
- Is this the right stage in the cycle to be encouraging people to take on more debt?
- This is a time to be focused on the data and not give a lot of forward guidance
- Very likely we'll end up doing QE in the next recession
I think he wasn't as hawkish as might have been feared. He's certainly open to changing his mind, so that's a bit more dovish. As it stands now, he sounds like he's going to dissent again.
This quote pretty much sums it up: "I'm not saying there aren't circumstances where I'm willing to ease, I just want to see evidence that we are actually going into something that's more of a slowdown."
