Taking questions now
- Communication of Fed policy has been pretty good
- Dot plot an example of a tool that gets over interpreted
- Fed should be comfortable if inflation was mildly above 2% for a period.
- yield curve inversion is an interesting topic
- banks can stay profitable despite inverse yield curve
- yield curve normally flattens during rate hike cycle
- does not view yield curve as much of a harbinger of a recession. Attributed to other causes like size of Fed balance sheet
The Fed's Dot Plot at the March meeting showed that the Fed now sees zero moves in rates in 2019. It was showing 2 hikes at the previous estimate.