Federal Reserve Board Governor Michelle Bowman speaks on "Forward Guidance as a Monetary Policy Tool: Considerations for the Current Economic Environment" before the Money Marketeers of New York University, in New York.
Headlines via Reuters:
- 'sizable' rate hikes should remain on table if do not see signs inflation is moving down
- Fully supported Fed's 75-bps rate hikes
- If inflation starts to decline, slower pace of rate increases would be appropriate
- 'not yet clear' how high rate will need to go
- Inflation much too high, must bring it down
- Fed funds rate will need to rise to restrictive level, remain there 'for some time'
- Not yet clear how much time before inflation moves down in 'consistent,' 'lasting' way
- Significant uncertainty on inflation outlook makes it challenging to provide precise guidance on path of rates
- Outlook for inflation, economic activity has 'significant two-sided risks'
- High uncertainty puts a premium on flexibility
- Should limit explicit forward guidance to when rates are near zero and inflation subdued
- Benefits of explicit forward guidance lower, risks are higher now than in years following the 2008 crisis
- Should communicate unwavering resolve to restore price stability, decide policy meeting-by-meeting, stay attentive to risks
Nothing much to set Bowman apart from most of her Federal Open Market Committee (FOMC) colleagues here. Bowman is acknowledging data-dependence to guide the rate-hike path ahead.
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