The Federal Reserve had a Q&A session today, pre-market and into the open. Here are a list of the bullet points from that session:
- Pandemic let demand away from in person services.
- History cautions strongly against prematurely loosening policy.
- Fed needs to keep at it until job is done.
- Fed will never factor in external political considerations
- Labor market remains strong.
- Inflation wouldn’t have happened without the pandemic.
- Pandemic led to tremendous shift in demand.
- Skeptical of using nominal income targeting for policy making.
- Fed’s dual mandate has served public well.
- Hopes to achieve period of growth below trend.
- Inflation can be tamed without very high social costs.
- Do not see need to return to scarce reserves system.
We are all waiting for the latest US inflation report on the 13th. We will see how hawkish the Fed is after that report.
