More from Feds George: Outlook pretty optimistic for 2H 2021
More from Feds Esther George
- Remains the case that the virus is the driver of the economy right now
- Outlook pretty optimistic for 2H of 2021
- Risks include logistics around vaccination program
- Fiscal policy remain important to US economic activity until the virus is in the rearview mirror
- clear that the mix of mortgage securities and treasuries will continue until economy is through this critical phase..
- Debate over bond purchases will commence when it is clear Fed is on track to meet its inflation and employment goals.
- To the extent economic optimism is behind rising long-term bond yields is consistent with the Fed policy.
- Rise in long-term yields so far is not concerning, and does not reflect tightening financial conditions(the 10 year yield is currently trading at 1.283% +7.5 basis points on the day)
- Policymakers will have to do with long-term implications of federal debt at some point
- Right now the economy needs a bridge to get past Covid
- Cost to federal government will not be insignificant in the future when interest rates increase.
- Does not see near-term inflation problems
- Could see price pressure build as people return to work
- Fed not looking at one-time price increases in particular industries
- Minimum wage increase comes to pass remains to be seen if it would be passed through to higher prices.
- Small businesses saying concerned about impact of higher minimum wage on margins
Touch / Click anywhere to close