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MNI BRIEF: Maximum Employment Alone Won't Move Fed-Clarida

WASHINGTON (MNI)

Federal Reserve Vice Chair Richard Clarida Wednesday reiterated his view the U.S. central bank should have a one year look-back period on inflation and emphasized that meeting one side of the dual mandate won't be enough to raise interest rates.

"Policy will not tighten solely because the unemployment rate has fallen below any particular econometric estimate of its long-run natural level," he said. "In our new framework, when in a business cycle expansion labor market indicators return to a range that in the Committee's judgment is broadly consistent with its maximum-employment mandate, it will be data on inflation itself that policy will react to."

Clarida's comments came in prepared remarks for a speech before the the Manhattan Institute's Shadow Open Market Committee. His comments did not include a view on the economic outlook.

MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com
MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com

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