Fed's Brainard: FOMC needs to adjust 'stale' language around accommodative policy in statement

Eren Sengezer FXStreet

Below are the key highlights from the Fed Governor Lael Brainard's recently delivered prepared remarks.

Italy political developments have reintroduced some risk to synchronized global growth.
Gradual U.S. rate hikes appropriate; alert to emerging risks and ready to adjust as needed.
Euro area financial conditions have worsened due to Italy political uncertainty.
I expect U.S. policy to gradually shift to 'modestly beyond neutral' setting.
Longer-run neutral policy rate likely to remain historically low even if it rises in shorter term.
U.S. fiscal stimulus, years below inflation target mean gradual rate hikes warranted.
A challenge to set policy in face of sizeable fiscal stimulus.
Global downside risks include emerging-market capital-flow reversals, U.S. trade policy.
Major global central banks likely to remain on divergent policy paths for some time.
Downplays negative signal from any possible yield-curve inversion.
FOMC likely needs to adjust 'stale' language around accommodative policy in statement.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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