Fed’s Bostic Comments:
- “I am not in a hurry” to cut rates; want to ensure policy easing is “unambiguous.”
- Would rather wait longer for a rate cut to ensure inflation does not start to bounce around.
- Fed has to be cautious about the first rate move; it may need to be later to avoid stoking “pent-up exuberance” for investment and other spending.
- Though businesses are confident about the economy, they don’t feel they have the same pricing power as even six months ago.
- Upcoming framework review will be “robust” given the number of open questions about the economy and policy.
- No longer hearing about difficulties in supply chains; hope is that goods deflation continues.
- Expecting inflation to decline but “relatively slowly”; would not expect a rate cut before the fourth quarter.
- Fed’s highest priority is to get inflation back to 2%.
- Efficacy of monetary policy may be weaker than in the past, but it is still having an impact.
- Policy is impacting rate-sensitive sectors and delaying investment.
- Businesses are confident in the underlying strength of the economy; the next year or two should see continued solid performance.
This article was written by Greg Michalowski at www.forexlive.com. Source