Fed's Quarles: Fed should not use tools to address supply chain disruptions

Eren Sengezer FXStreet

Federal Reserve's Vice Chairman for Supervision Randal Quarles said on Tuesday that his view on inflation has not changed in the last few months and reiterated that he still expects it to be transitory, per Reuters.

Additional takeaways

"We could be wrong but we do have the tools to cope with that, so the right risk-management approach is the one we're doing."

"I don't think we should use our tools to address supply chain disruptions."

"Question is whether they last long enough to affect inflation expectations."

"If we saw expectations beginning to change, the fact of the Fed acting would help to anchor expectations."

Market reaction

The greenback remains on the back foot after these comments and the US Dollar Index was last seen losing 0.15% on the day at 89.70.

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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