Fed Vice Chair Richard Clarida said in a speech that “we are clearly a ways away from considering raising interest rates and this is certainly not something on the radar screen right now”.
If outlook of inflation and unemployment turn out to be the actual outcomes, the necessary conditions for raising federal funds rate “will have been met by year-end 2022.” If inflation remain well anchored at 2%, commencing policy normalization in 2023 would then be “entirely consistent with our new flexible average inflation targeting framework.”
As for asset purchases, he said FOMC members expected the economy to continue to move toward the standard of “substantial further progress.”
FOMC will asses the progress in coming meetings. He reiterated the pledge that, “we will provide advance notice before making any changes to our purchases.”
