Comments from Fed Governor Lael Brainard at the Council on Foreign Relations
- There are benefits to holding off on hiking until data confirms economic rebound and near-term international risks pass
- Better to wait until Brexit vote has passed
- Data on Q2 mixed, want to have greater confidence in rebound
- Risks to inflation returning to 2% over the medium term are weighted to the downside
- Financial conditions have eased since mid-Feb but conditions underlying bouts of turmoil largely remain in place
- Exchange rate movements in response to Fed policy surprises have become much greater over last year
- The data in today's labor market report on balance suggest that the labor market has slowed.
- Market-based measures of inflation compensation remain extremely low
- Full text
A Q&A after the speech is scheduled.
Highlights of her May 10 Bloomberg interview are here.
The kneejerk reaction to this speech will be that it was massaged to be more dovish after the jobs report and that might be true but, to be fair, Brainard has been a dove all along.
Update: She's gone off the text a bit in the delivery and said today's jobs report was sobering.
Direct quote from the text:
"In general, demand growth in recent quarters has benefited from a relatively strong household sector--buoyed by a recovering labor market, reduced oil prices, and low interest rates--and has been pulled down by weak business investment and net exports."
More:
"It appears likely that the medium-term neutral rate, or the real federal funds rate consistent with the economy remaining at full employment and 2 percent inflation, may be quite low."
