Federal Reserve's Vice Chair Richard Clarida: Economic growth is solid

Fed will act as appropriate.
We are going one meeting at a time.

Following the recent US data from where both key ISM surveys have pointed to a major slowdown in US growth rates, and ahea of today's showdown in the Nonfarm Payrolls data, markets are keenly listening to Federal Reserve speakers in anticipation of a Fed rate cut.

Federal Reserve's Vice Chair Richard Clarida who is speaking in New York in a Q&A has said that the economy is in good shape and does not think recession risks are elevated

Economic growth is solid.
Consumer is in a good place.
Focus of the fed is to keep US economy in good place.
Fed is not a pre-set course.
Fed will act as appropriate.
Uncertainty about trade policy is impacting investment.
It is important that inflation is achieved on a symmetric basis around the 2% level.
Very happy with the fed’s decision from July and September to cut rates.
We are going one meeting at a time.
President trump’s tweets do not affect monetary policy.
Financial conditions have eased substantially this year in part because of the Fed's communication.

FX implications:

The US data has demonstrated to the markets that the US is not isolated to a global slowdown and, indeed, trade wars are problematic. The US Dollar is feeling some pain and will be expected to react significantly to economic data leading into the Fed later this month. "Markets are pricing 20bp of easing at the 31 October meeting and a terminal rate of 0.92% (vs 1.88% currently)," analysts at Westpac explained.

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