MNI: Fed Says Policy 'Likely' To Remain Appropriate

-- Policy Not On A Preset Course

By Evan Ryser

     WASHINGTON (MNI) - Federal Reserve Vice Chairs Richard Clarida and Randal

Quarles said Friday rate policy is in a good place and will remain data

dependent as the economy remains consistent with the Fed's outlook of moderate

economic growth.

     "By many metrics, the U.S. economy is in a good place," Clarida said in

prepared remarks for a speech at the Japan Society in New York. 

     "If developments emerge that cause a material reassessment of our outlook,

we would respond accordingly. Policy is not on a preset course, and we will be

monitoring the effects of our policy actions," Clarida said 

     --DOLLAR

     Clarida said the the economy is in a "good place," but noted that there

"are some evident downside risks to this outlook." Global growth has been

sluggish since mid-2018, trade policy appears to be a headwind for

manufacturing, and uncertainty continues to surround Brexit. 

     While elevated uncertainties about the global outlook can drive up the

value of the dollar, Clarida said, the value of the greenback "does not appear

to play much of a role in explaining the decline in sharp slowdown in (sic) U.S.

exports over the past year."

     The the labor market is "thriving," Clarida said, while inflation remains

muted with core PCE at 1.7% and headline PCE at 1.3%. Clarida noted that

"inflation expectations reside at the low end of a range I consider consistent

with price stability." 

     -- QUARLES

     The Fed's Randal Quarles said in a separate event in New Haven Friday that

the Fed's rate cuts should be enough to bring the economy through a period of

weaker global growth and investment.

     "With these policy adjustments, I believe that the economy will remain in a

good place," Quarles said in the text of his remarks. "We see the current stance

of monetary policy as likely to remain appropriate as long as incoming

information about the economy continues to be broadly consistent with our

outlook."

     Inflation should remain close to target and the labor market has been

strong, Quarles said. "The U.S. economy is doing well, and I am optimistic about

the outlook," he said.

--MNI Washington Bureau; +1 202 371 2121; email: evan.ryser@marketnews.com

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