Richard Clarida is Vice-Chair of the Federal Reserve System
- says he is bullish on US recovery
- says economy has good momentum, vaccine welcome news, and there is a lot of fiscal, monpol support
- there is a lot of pent up labor supply in the US
- not concerned will see an inflation response this year inconsistent with goals
- we will not be lifting off on rates until we actually get to 2% inflation, and max employment
- says later this year inflation will most likely be above 2%, because of base effects
- says most of that rise will be transitory; expect inflation to be around 2% by end of year
- there's a lot of slack in economy that can meet extra demand from fiscal, monpol support
- markets are pricing in a better outlook for the u.s. economy
- Fed 'to a person' will be patient, careful and very transparent
- talk about QE taper is premature
- says current settings of monetary policy are appropriate for now and rest of year
- biggest risk to economic outlook is the virus
I bolded that bit about the two mandates. The Fed, and Clarida repeating it here, says they'll be responding to data but then he goes on to dismiss data with 'base effect' talk. A lot of these officials think they are much smarter than the data and the evidence for that does not really hold up.
