Fed conundrum: How to alert markets rates were going up

Fed's Bullard: Average inflation targeting would ‘make a lot of sense right...

Committee projections for the USA economy are similar to our projections at this time one year ago, but over the course of 2019, the FOMC shifted the stance of US monetary policy to offset some significant global growth headwinds and global disinflationary pressures. "The United States has likely skirted the recession risks of past year, with businesses adjusting to a new trade environment and the most acute worries about a trade war "abated somewhat", St. Louis Federal Reserve bank President James Bullard said on Thursday", - Reuters wrote.

US central bankers forecast last month that inflation minus food and energy would rise to 2% in 2021.

Measures of inflation expectations, both surveys and market prices, had retreated, but were are at the bottom end of the range which he considered consistent with the Fed's price stability mandate. Fed officials unanimously agreed to leave rates unchanged at last month's policy meeting and signaled that rates are likely to stay pat for the time being without a substantial change in their economic outlook. They also signaled policy would be on hold through 2020, keeping the central bank on the sidelines during a USA presidential election year.

"Monetary policy is in a good place and should continue to support sustained growth", Vice Chairman Richard Clarida told the Council on Foreign Relations in NY on Thursday.

Looking ahead, monetary policy is not on a preset course.

USA interest rates are in a good place for now but policymakers are ready to change direction if the economy needs it, the second in command at the Federal Reserve said Thursday. Of course, if developments emerge that, in the future, trigger a material reassessment of our outlook, we will respond accordingly. He added later that the Fed's goal is not to target the repo rate.

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Finally, allow me to offer a few words about the FOMC review of the strategy, tools, and communication practices that we commenced in February 2019. In December, Fed officials discussed feedback from their listening sessions with community and business leaders around the country.

Fed Vice Chairman Richard Clarida said he expected the strong American consumer to continue to drive the current economic expansion, now in a record 11th year. We are drawing on these insights as we assess how best to achieve and maintain maximum employment and price stability.

Fed policymakers now say the chances of recession have fallen in recent months after a summer scare but that risks remain, according to a readout from the December meeting.

Thank you very much for your time and attention.

Fed's Barkin is a nonvoting member on the Federal Reserve Board this year.

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