At least three Fed officials said on Monday that they are prepared to withdraw their stimulus plan even if they do not see the threat of inflation.
Federal Reserve Board Governor Lael Brainard, New York Regional President John Williams and Chicago’s Charles Evans spoke in separate meetings, and they all spoke about policy austerity. The first stage is gratifying-monthly bond purchases are gradually decreasing, which provides support for the market and economy.
“I think it is obvious that we have made substantial further progress in achieving the inflation target. We have also made good progress in achieving maximum employment,” Williams told the New York Economic Club. “Assuming that the economy continues to improve as I expected, the pace of asset purchases may slow down soon.”
However, they emphasized that with this move, Called cone, And did not provide any signal about the imminent rate hike.
Brainard told the National Association of Business Economics: “The forward-looking guidance for maximizing employment and average inflation sets a higher standard for raising policy interest rates than slowing down the pace of asset purchases.” Any decision to delay the purchase of an asset will result in a signal about the time of lift-off.”
These positions are basically consistent with the statement issued after the Federal Open Market Committee meeting last week.The official consensus “It may be necessary to reduce the scale soon,” Chairman Jerome Powell said after the meeting that he hopes to end the monthly bond purchase plan with a minimum of US$120 billion in mid-2022.
Although the committee does not expect current inflationary pressures to emerge, it will still take austerity measures. Highest in decades,insist.
Evans even stated that he believes that the Fed’s inflation target should be higher than the traditional 2% target. Instead, he said its goal should be “above but close to 2%” inflation.
“I think the FOMC’s own actions and communication play an important role in curbing long-term inflation expectations,” he also said in a speech at the National Association of Business Economics on Monday. “In general, I am more disturbed that we have not produced enough inflation in 2023 and 2024, rather than that we may suffer too much inflation.”
Williams said that as “the volatility of supply and demand related to the pandemic fades,” he expects inflation to continue to be higher than 2% in “about a year.” However, he said that inflation should fall to the target sometime this year.
FOMC members stated in the quarterly economic outlook that they believe Core inflationExcluding food and energy prices, the increase this year is 3.7%, then drops to 2.3% in 2022, and then to 2.2% and 2.1% respectively in the following two years.The officials also wrote in pencil May raise interest rates once There will be three each in 2022, 2023 and 2024.
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