Fed's Clarida: Downside economic risks have diminished due to vaccine

Author: Adam Button | Category: Central Banks

Comments from the Fed vice chair

Clarida
  • Vaccine news has brightened economic prospects
  • It will take some time for economy to recovery to pre-virus peak
  • Fed will use its full range of tools to aid economy
  • Pace of economic recovery moderated in the fourth quarter
  • Spending on goods is strong, services spending suppressed
  • Inflation leveled out after picking up over summer
There's a shift ongoing where the Fed has buried the idea of more stimulus and is now much more constructive.

  • Don't expects jobs setback in December to continue in 2021
  • Time to slow pace of bond buying 'well down the road'
  • Expects to keep pace of QE through 2021
  • Could see inflation above 2% due to base effects
  • Predicts inflation will finish this year above last year but still below 2% target
  • We have policy positioned exactly where we want it
  • Rates at these levels are not a concern for me
  • We have to take into account why yields are rising
Treasury yields are pushing higher again.

For bank trade ideas, check out eFX Plus
By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose