8 Mar 2016
Fed speak: Contrasting opinion – Deutsche Bank
Research Team at Deutsche Bank, suggests that yesterday’s Fedspeak offered two very differing opinions ahead of next week’s FOMC meeting.
Key Quotes
“Fed Vice-Chair Fischer played down the suggestion that the link between strong employment and inflation was broken, saying that although the link has never been very strong, ‘it exists and we may well at present be seeing the first stirrings of an increase in the inflation rate’.
Meanwhile, speaking at a separate conference in Washington, Fed Governor Brainard opined that ‘I am heartened by the continued strong progress on employment and the resilience of American consumers, which stand against a considerably more challenging global backdrop’. That said, she also warned that ‘we should not take the strength in the US labour market and consumption for granted’ and that ‘sources of robust demand around the globe are few, and sources of weakness relatively greater’.
Brainard also cautioned that ‘tighter financial conditions and softer inflation expectations may pose risks to the downside for inflation and domestic activity’ and that ‘from a risk-management perspective, this argues for patience as the outlook becomes clearer’.”
Key Quotes
“Fed Vice-Chair Fischer played down the suggestion that the link between strong employment and inflation was broken, saying that although the link has never been very strong, ‘it exists and we may well at present be seeing the first stirrings of an increase in the inflation rate’.
Meanwhile, speaking at a separate conference in Washington, Fed Governor Brainard opined that ‘I am heartened by the continued strong progress on employment and the resilience of American consumers, which stand against a considerably more challenging global backdrop’. That said, she also warned that ‘we should not take the strength in the US labour market and consumption for granted’ and that ‘sources of robust demand around the globe are few, and sources of weakness relatively greater’.
Brainard also cautioned that ‘tighter financial conditions and softer inflation expectations may pose risks to the downside for inflation and domestic activity’ and that ‘from a risk-management perspective, this argues for patience as the outlook becomes clearer’.”