Vice-Chair Clarida had little new to say in.....>

FED: Vice-Chair Clarida had little new to say in prepared comments at the

Council on Foreign Relations vs December FOMC comms, but a few points from Q&A.

All suggests his view (remains) that next move more likely a cut than a hike.

- Says view since Dec FOMC remains intact; downside risks lower since summer.

- Baseline view for core infl to begin to move up toward 2% this year; but "to

be honest", risks are skewed to the downside. Notes some pickup in inflation

expectations (breakeven/surveys).

- Global disinflationary forces still relevant (import prices fell in 2019).

- Re a Fed staff paper estimating neutral real rate = -2%: such numbers "seem

low to me". His long run dot is unchanged since he got to the Fed in Sep 2018.

- In next downturn, fwd guidance powerful; QE may have diminishing returns.

- In policy review, thinking about different approaches that would include avg

inflation targeting. Also "our review is not looking at fiscal policy options"

- Will be discussing reserves/Repo at upcoming FOMC meeting; ultimately think

plan announced in Oct will get reserves up to the ample level, and at that point

we would not expect to have ongoing large repo ops.