Fed Governor Lael Brainard warned that “downside risks have definitely increased relative to that modal outlook for continued solid growth.” She added that back in December, she “had already noted that crosscurrents were increasing and that tailwinds were dying down, and I think that is even more true today because of those downside risks that are gathering.”

Brainard pointed to external risks including China’s economy, US-China trade conflicts and Brexit. And, “We are a very international economy… Our financial system in particular has shown itself to be very responsive to earnings abroad, to financial conditions and volatility abroad. So, yeah, I’m very attentive to the international outlook.”

Domestically, she believed that momentum has been “pretty solid”. But today’s retail sales numbers “caught my eye”. Though she “didn’t want to make too much” of one month’s numbers.

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On monetary policy, she’s “comfortable waiting and learning” and the current policy is “in a good place”. And, she would weigh “what move, if any, later in the year”. Meanwhile, she added that the “balance sheet normalization process should probably come to an end later this year”.


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