Fed Vice Chair Clarida speaking at the Peterson Institute for International economics
- starting hikes in 2023 is entirely consistent with the Fed framework
- economy has made progress toward goals
- Fed could see substantial further progress by the end of this year
- Core PCE inflation above 3% will be more than moderate overshoot
- his forecast for inflation, employment or similar to the medium of the Fed policymakers June forecasts
- expects his assessment for maximum employment outcomes meets the forecasts to be reached by end of 2022
- says that the economy has made progress toward goals since setting a substantial further progress bar for tapering asset purchases in December 2020
- economy on track for most rapid recession rebound and 50 years
- sees policy normalization beginning in 2023
- economy has made progress toward goals required for tapering
- spreads of Delta vibrant eight downside risk
- most of the inflation overshoot will prove to be transitory
- risk to my inflation Outlook is to the upside
- support from fiscal policy, along with monetary policy, can offset constraints of effective lower bound
- Fed policy decisions depend on outcomes, not outlook, which is uncertain
- Fed will give advance notice of taper
I see the comments from Clarida as being perhaps a bit of a hybrid. He is neither too hot or too cold. Concerned about inflation and sets 3% as his limit for inflation by the end of the year and does not rule out a hike in 2022.
