Comments from Fed Governor Randy Quarles
- Will be important to begin discussing plans to adjust QE at upcoming meetings
- He's quite optimistic about the pace of growth
- Time to discuss rate hikes is 'far into the future'
- Inflation to meet the bar for tapering later this year but labor market improvement will be slower
- We may need more communications about what 'substantial further progress' towards the employment goal means
- We need to remain patient
- Inflation to subside over the next several months and run close to 2% at some point in 2022
- The uneven global recovery and supply bottlenecks pose potential headwinds for the economy
- Sees medium term inflation risks tilted to the upside
The Fed has done a good job of easing into the taper talk in drips and drabs. We heard similar lines from Clarida yesterday and given the muted reaction from markets then and now, they've done a good job of easing the transition.
Quarles said that if his expectations are met, it's "important for the FOMC to begin discussing our plans to adjust the pace of asset purchases at upcoming meetings."
For more see: What's the timeline for the Fed to signal a taper and then deliver it?
