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Powell Questioned On Risks Related To Global Divergences

FED
  • Q: What considerations or risks do global divergences present to the FOMC?
    • A: You're right, I think that may happen. We all serve domestic mandates. I think the difference between the US and other countries that are now considering rate cuts is that they're not having the kind of growth we're having. We have the luxury of strong growth and a strong labor market, and we can be patient. Can be careful and cautious as we approach the decision to cut rates, whereas I think other jurisdictions may go before that. I think obviously the markets see it coming. It's priced in now. We haven't seen the emerging market turmoil that was more frequent 2-30 years ago, partly because they have much more credibility on inflation.
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  • Q: What considerations or risks do global divergences present to the FOMC?
    • A: You're right, I think that may happen. We all serve domestic mandates. I think the difference between the US and other countries that are now considering rate cuts is that they're not having the kind of growth we're having. We have the luxury of strong growth and a strong labor market, and we can be patient. Can be careful and cautious as we approach the decision to cut rates, whereas I think other jurisdictions may go before that. I think obviously the markets see it coming. It's priced in now. We haven't seen the emerging market turmoil that was more frequent 2-30 years ago, partly because they have much more credibility on inflation.