LHMeyer/Monetary Policy AnalyticsPowell Could Put Up With 2.5% Inflation to Keep Growth Pumping Bloomberg News on Feb 26, 2018 “I’ve had some hawks on the committee surprise me and say they wouldn’t be worried about a modest overshoot” as long as it’s below 2.5 percent, former Fed governor Laurence Meyer said, without identifying who those anti-inflation stalwarts […]
Powell Faces Policy ‘Combativeness’ in Riskier Post-Yellen World Bloomberg News on Feb 26, 2018 Because his testimony is happening before the FOMC formally updates its forecast next month, Powell will have to manage the tension between an upgraded economic outlook and a policy path that is still stuck at three hikes from December, said former […]
Powell’s swearing-in remarks (2/13) were typical for an incoming Chairman. He reiterated the importance of Fed independence: “Congress has wisely entrusted us with an important degree of independence so that we can pursue our monetary policy goals without concern for short-term political pressures.” As for current conditions, he noted that “Monetary policy has continued […]
The volatility in financial markets captured the attention of a number of policymakers. On Wednesday (2/7), Dudley said stock market developments had “no consequence” on his economic forecast and didn’t think “it’s a big story at all for central bankers.” He said it would become a factor if it continued to fall sharply, noting, “It’s […]
Dear Jay: High-Powered Advice for the Incoming Fed Chairman Bloomberg News on Feb 05, 2018 Laurence Meyer Former Fed governor who now heads his own consulting company “I would have better communication about the meaning of the symmetric inflation objective…It has this hint that you want to be above 2 percent late in the cycle. […]
The debate on the number of hikes in 2018 suggests the consensus sees upside risks to the December median projection of three. Williams said either three or four hikes was “still reasonable” (Feb 2). Kaplan appeared to emphasize the upside risk to his baseline of three hikes this year: “If there’s a likelihood that I’m […]
Fed Nominee Goodfriend Says U.S. Central Bank Must Stay Alert Bloomberg News on Jan 22, 2018 “What most defines his views, at least more accurately than the standard ‘dovish’ or ‘hawkish,’ would be an aggressiveness whenever inflation credibility is threatened in either direction,” former Fed Governor Laurence Meyer said in a note to clients following […]
Several policymakers continued to be wary of possible overheating risk. Kaplan argued that tax reform “makes it more likely that the headline unemployment rate is going to get into the 3s by the end of 2018…This legislation further adds to my conviction we should be moving gradually but deliberately in 2018” (Jan 17). He wanted […]
Fed Officials See Benefits in Letting Inflation Run Above Target Bloomberg News on Jan 19, 2018 Former Fed Governor Laurence Meyer reckons that officials might tolerate inflation rising to around 2.5 percent. Dudley’s stated willingness to accept an overshoot “has a lot of force” given his senior position in the Fed hierarchy, according to Meyer, […]
Remarks from a number of policymakers confirmed our inferences from the December dots (see our Naming the December Dots: Pace of 2018 Hikes). Bostic, Bullard, Harker, and Evans appeared to see fewer than three hikes as warranted in 2018; Dudley and Kaplan shared the median view of three hikes; and Rosengren saw more than three hikes […]