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Fed's Mester: Market moves don't change US outlook

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 4, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    Federal Reserve's Mester crossed the wires, via Reuters, noting that recent market moves don't change US outlook, although she added that risks exist.


    Expects US. economy to overcome market turbulence and regain footing

    Recent market moves do not change US outlook but there are risks

    Only a steeper, longer drop in stocks could dampen US economic outlook

    US economy 'solid' due to healthy jobs and income growth

    Expects labor market improvement, lower unemployment this year

    Oil drop means lower US inflation for longer than previously thought

    Says might take longer to hit 2 pct inflation target

    Surprisingly high oil production means lower oil for longer

    Federal Reserve policy now well-calibrated to risks

    Expects rates to rise gradually over time

    Job growth is strong enough to lower the US jobless rate

    Still sees gradual rate rises as appropriate

    I haven't seen enough to change my modal outlook

    Asked about earlier plans for 4 rate hikes this year, says has not changed US outlook

    I like that we are" gradually raising rates, but would respond to slowdown

    Skeptical of negative interest rates in the US

    Likely not that effective

    End portfolio reinvestments only after rates up to 1 pct or so

    Policy will not reflect market expectations, which are apt to move

    Does not want to take action that would be 'shocking' to markets

    Federal Reserve should not be a mirror to financial markets

    Shrinking balance sheets removes policy accommodation
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