WASHINGTON, Federal Reserve Governor Lael Brainard said on Wednesday she wanted to see how the US economy is performing before making changes to the central bank’s current stance on monetary policy.
“The committee has a pretty substantial adjustment in the path of rates over the past few meetings,” Brainard told American CNBC channel in an interview.
“It will take some time to see that work through the economy, so I certainly want to monitor and assess how the economy is reacting to those cuts.” The adjustment Brainard refers to is the three rate cuts by the US central bank this year. Those rate cuts followed four rate hikes in 2018, the last of which contributed to a massive sell-off in US stocks.
Brainard noted residential investments have improved since the Fed started easing again, but reiterated she wants to “wait for a little bit” before the central bank makes changes as she assesses how “the outlook is adjusting.” One of the factors Brainard is accounting for in her outlook is the status of US-China trade relations, she said.
“We still hear from our business contacts that they’re sitting on the sideline waiting for some of this uncertainty to be resolved,” said Brainard. “I don’t think the expectation is for a major deal, but even a truce would be a significant reduction in uncertainty for a lot of businesses around the country that are sitting on the sidelines in terms of investment.
“I don’t think the expectation is for a major deal, but even a truce would be a significant reduction in uncertainty for a lot of businesses around the country that are sitting on the sidelines in terms of investment.”
Source: Kuwait News Agency