slowing inflation could make her rethink future policy
Federal Reserve Board of Governor (voting member) speaks in NY
- Data consistent with rebound this quarter
- Time for balance sheet policy change coming in clearer view
- Global outlook brighter, risk balance more favorable
- Further policy tightening likely appropriate soon
- US GDP growth expected to rebound in second-quarter
- Can't say yet how big Fed balance sheet should be in future
- Lack of progress in core inflation source of concern
- Debt limit uncertainty may influence risk outlook
- May want to delay rate hikes if inflation continues to slow
- High corporate debt level warrants vigilance
- soft inflation may prompt rate rethink if it persists
- Lax auto loan underwriting also a concern
The caveat on rates due to slow core inflation is an interesting twist. However, for the time being, it seems "all systems are go" for a June hike (with the Friday employment report casting the the final vote).
Brainard is a permanent voting member on the Federal Reserve Board of Governors.
