Cleveland Fed President Loretta Mester said a in a speech that “the economy has been performing well and I expect that to continue”. Fed should continue with a “patient” approach regarding interest rate adjustments. Also, she didn’t favor further policy accommodation to lift inflation back to target.
Mester said, “my current view is that monetary policy is well calibrated to support our dual mandate goals, and a patient approach to policy changes is appropriate unless there is a material change to the outlook. She added that Fed has been undershooting inflation goal for some time, “so a natural question is whether policymakers should add even further accommodation to spur a faster return of inflation to our goal.” But, “I would not favor that at this time,” she said. “In my view, doing so would raise the risk of generating imbalances that would threaten the expansion and undermine our employment goal.”
“Recent emergence of the coronavirus in Wuhan, China” is among the risks to the US economy. “This might mean a larger negative impact on growth in China in the near term but perhaps a less protracted one,” she said. “At this point, it is difficult to assess the magnitude of the economic effects, but this new source of uncertainty is something I will be carefully monitoring.”
BoE Haldane: A big chunk, if not all of uncertainty dissipated since last year
BoE Chief Economist Andy Haldane said a “big chunk, if not all” of uncertainty regarding domestic politics and Brexit had dissipated since the end of 2019. “Some early stage signs in surveys suggest there could be a stirring in the undergrowth when it comes to company investment plans”. Nevertheless, it’s “too early to declare victory,”
Haldane added that the global economy has grown stronger since the financial crisis more than a decade ago. BoE’s balance sheets are in better shape are in better shape too. He doesn’t see the buildup of new asset bubbles. Nor does he see a “wholesale retrenchment” of globalization even with US China trade war.