Fed's Brainard: "Need to be cautious in tightening monetary policy" - Nomura
Analysts at Nomura noted today's Fedspeak with Federal Reserve Governor Lael Brainard spoke at the Chicago Council on Global Affairs today.
Key Quotes:
"She discussed the evolving economic environment in the US and how this “new normal” could impact monetary policy.
The key features of the new normal include an undershooting inflation rate, greater-than-anticipated labor market slack, heightened uncertainty in foreign markets, persistently low neutral rate, and asymmetry in the Fed’s conventional policy tools available to respond to adverse developments.
In this environment, she emphasized the need to be cautious in tightening monetary policy. Ms Brainard also mentioned disappointing economic reports, such as slowing growth in foreign markets and declining business investment, to support her view. Her message today remains consistent with her dovish stance on policy, and her statements are consistent with our view that the most likely timing of the next rate increase will come at the December meeting."