Fed's Miran: Policy outook remains for rate cuts

Eren Sengezer FXStreet

Federal Reserve (Fed) Board of Governors member Stephan Miran told Bloomberg on Monday that they shouldn't make policy decisions on short-term headlines.

Key takeaways

"Premature to judge the current situation."

"Traditional central bank view is oil shocks don't hit core inflation."

"The labor market could still use support from monetary policy."

"Still not enough clarity to know monetary policy should react to current events."

"Expecting higher headline inflation but too soon to say it will hit core."

"Higher energy prices depress demand, offsets some of inflation impact."

"It would be highly unusual for Fed to react to oil shock now."

"Watching for broad based second round impacts from higher energy."

"It could happen that higher oil drives up inflation, but not seeing it yet."

"Policy outook remains for rate cuts."

"The job market is continuing gradual softening trend."

"Balance of risks got worse on both sides."

Market reaction

The US Dollar Index extends its daily decline following these remarks and was last seen losing 0.38% on the day at 99.12.

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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