Fed Vice Chair Richard Clarida said “we can afford to be patient about assessing how to adjust our policy stance to achieve and sustain our dual-mandate objectives”. He noted the Fed begins 2019 “as close to our assigned objectives (price stability and full employment) as we have in a very long time”. Thus, “patience is a virtue and is one we can today afford.”
Clarida also warned that “recent developments in the global economy and financial markets represent crosswinds to the U.S. economy”. And, ” If these crosswinds are sustained, appropriate forwardlooking monetary policy should seek to offset them”. Fed needs to be ” cognizant of the balance we must strike between (1) being forward looking and preemptive and (2) maximizing the odds of being right.”
