During a discussion panel organized by the Bank of the Federal Reserve (FED) of Atlanta, the presidents of the Fed of San Francisco and Cleveland, Mary C. Daly and Beth Hammack, took the opportunity to express their concern for the current state of the US economy. While economic data is still firm, US trade policy has made many consumers and companies feel more unhappy. The president of the Fed of Atlanta, Raphael Bostic, also participated in the event, adding to your previous comments made on Tuesday.
The intermittent tariffs of the Trump administration threaten to overwhelm the US commercial logistics, which depends largely on large -scale import to meet domestic demand. As several responsible for the FED have indicated in recent weeks, an uncertain commercial landscape has made it difficult for companies to invest in their operations and hire or fire employees, freezing typical commercial operations associated with a healthy economy.
Mary C. Daly stands out
The Federal Reserve policy is in a good place.
highly sensitive to inflation risk.
Net impact of commercial, immigration policies and others of the unknown Trump administration.
Beth Hammack stands out
The feeling data about the economy are worrisome.
Companies are reluctant to fire employees.
It will take longer to observe how business decisions are affected by commercial policy.
Currently, the optimal movement for the Federal Reserve is to refrain from taking action.
The Federal Reserve is well positioned to be patient.
Inflation perspectives are stable, a possible change could indicate action by the Fed.
Inflation expectations remain well anchored.
Raphael Bostic stands out
Recession is not expected, but it is uncertain when homes and companies will feel comfortable making long -term expenditure decisions.
High profile consultations, such as commercial policy, seem to be advancing towards greater clarity.
Fed Faqs
The monetary policy of the United States is directed by the Federal Reserve (FED). The Fed has two mandates: to achieve prices stability and promote full employment. Its main tool to achieve these objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the objective of 2% set by the Federal Reserve, it rises interest rates, increasing the costs of loans throughout the economy. This translates into a strengthening of the US dollar (USD), since it makes the United States a more attractive place for international investors to place their money. When inflation falls below 2% or the unemployment rate is too high, the Federal Reserve can lower interest rates to foster indebtedness, which weighs on the green ticket.
The Federal Reserve (FED) celebrates eight meetings per year, in which the Federal Open Market Committee (FOMC) evaluates the economic situation and makes monetary policy decisions. The FOMC is made up of twelve officials of the Federal Reserve: the seven members of the Council of Governors, the president of the Bank of the Federal Reserve of New York and four of the eleven presidents of the regional banks of the Reserve, who exercise their positions for a year in a rotary form.
In extreme situations, the Federal Reserve can resort to a policy called Quantitative Easing (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non -standard policy measure used during crises or when inflation is extremely low. It was the weapon chosen by the Fed during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy high quality bonds of financial institutions. The one usually weakens the US dollar.
The quantitative hardening (QT) is the inverse process to the QE, for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the bonds that it has in portfolio that they expire, to buy new bonds. It is usually positive for the value of the US dollar.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
