Fed's Brainard: New policy approach avoids need to tighten preemptively


St. Louis Federal Reserve President James Bullard said on Wednesday that the Federal Reserve's new monetary policy approach avoids the need to tighten preemptively, as reported by Reuters.

Additional takeaways

"Avoiding preemptive tightening could boost employment, the economy's potential growth rate."

"The timing of interest rate liftoff depends on realized progress toward maximum employment, 2% average inflation."

"Changes in the Fed's policy rate after liftoff are likely to be only gradual."

"Coronavirus vaccines, additional fiscal support are positive developments, but near-term economic outlook remains challenging."

"The economy remains far from our goals, seeing a loss of momentum in the fourth quarter of 2020."

"Continued social distancing in cold winter months likely to drag on spending."

"Inflation remains very low; may rise temporarily above 2% in a few months but we need to see a sustained improvement to meet our goal."

"Employment remains far from the Fed's goals, economic recovery is highly uneven."

"The economic outlook is highly uncertain, will depend on the path of virus and vaccination campaign."

"Some upside risk if vaccines trigger globally synchronized expansion."

"It is too early to say how long it will take to reach the Fed's goals."

Expecting the Fed's current pace of asset purchases to remain appropriate for quite some time."

Market reaction

The US Dollar Index showed no significant reaction to these remarks and was last seen gaining 0.2% on a daily basis at 90.27.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD hits fresh one-month low amid souring market mood

EUR/USD has been extending its falls and dips below 1.21 as US retail sales badly disappointed and the worsening mood is supporting the safe-haven dollar. Markets digest Biden's stimulus plan. US Consumer Sentiment declined to 59.2 points. 

EUR/USD News

GBP/USD retreats toward 1.36 amid fresh dollar strength

GBP/US has pared its gains and falls toward 1.36 as the dollar gains ground. The UK economy shrank by 2.6% in November, better than estimated. The UK is ramping up its vaccination campaign and PM Johnson is pressured to ease the lockdown. 

GBP/USD News

Gold extends sideways grind near $1,850

The XAU/USD pair registered small daily gains on Thursday but struggled to extend its recovery amid a lack of significant fundamental drivers on Friday. As of writing, the pair was up 0.15% on a daily basis at $1,849.

Gold news

Forex Today: Markets “sell the fact” on Biden's stimulus, dollar rises, retail sales eyed

Markets are on the back foot after Biden hinted about tax hikes while introducing stimulus. The safe-haven dollar is edging higher despite Powell's pledge to keep monetary policy accommodative. 

Read more

DXY breaks above key downtrend, eyes move above 91.00

USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.

US Dollar Index News

Forex MAJORS

Cryptocurrencies

Signatures