Fed chair Jerome Powell devliered a speech on “Monetary Policy Influences on Global Financial Conditions and International Capital Flows” in a conference in Zurich today. Powell said that “Fed policy normalization has proceeded without disruption to financial markets, and market participants’ expectations for policy seem reasonably well aligned with policymakers’ expectation.” And because that “markets should not be surprised by our actions”. And, even though there could be spillovers of Fed’s actions to other economies, the role of Fed’s monetary policy is “often exaggerated”.
Regarding emerging market economies, Powell said that Fed and other advanced economies “played a relatively limited role” in the surge capital flow to these markets in recent years. Hence, “there is good reason to think the normalization of monetary policies in advanced economies should continue to prove manageable for” emerging economies.”
