Fed's Brainard: New framework avoids need to tighten preemptively

Author: Adam Button | Category: Central Banks

Comments from the Fed Governor:

  • Timing of interest rate liftoff depends on realized progress towards maximum employment and 2% inflation
  • Changes in Fed's policy rate after liftoff 'likely to be only gradual'
  • Near-term economic outlook challenging but additional fiscal support welcome
  • Economy 'remains far from our goals', sees loss of momentum in Q4
  • Inflation may temporarily rise above 2% in a few months but need to see sustained improvement
  • Sees some upside risks if vaccines trigger globally synchronized expansion
  • Too early to say how long it will take to reach Fed goals but 'it will take time'
  • Expects current pace of asset purchases to remain appropriate for 'quite some time'
There are few hints here on anything. These headlines hit at the same time as a strong 20-year bond sale and both are weighing on the dollar.

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