Fed Gov. Barr: Q1 Inflation was disappointing. Did not provide confidence to ease policy.

Fed Gov. Barr speaking. He is the Fed member in charge of regulation, but he does add that Q1 inflation was disappointing and Expects the Fed to keep rates steady and watch economy going forward.

• Regulators exploring targeted adjustments to existing liquidity rules
• Regulators considering requiring larger banks to hold minimum levels of reserves and pre-positioned collateral at discount window
• Larger banks would be required to have available liquidity to cover uninsured deposits
• Regulators considering restriction on how many banks can rely on ‘held-to-maturity’ securities under liquidity requirements
• Regulators reviewing regulatory treatment of certain types of deposits, including those tied to venture capital or cryptocurrency businesses
• Q1 inflation “disappointing,” did not provide the confidence needed to ease monetary policy
• Fed will need to allow tight policy further time to continue to do its work
• Fed in a good position to “hold steady” and watch economy
• Vigilant to the risks to both inflation and employment mandates
• Current “cautious” approach to managing both sets of risks

The comments from the Vice Chair on policy are consistent with a steady, wait-and-see Fed. The CPI data and retail sales data last week are keeping hope alive that growth was low in inflation will start to ease further.

US stocks are clinging to small gains ahead of the open, and after Barr’s comments:

• Dow Industrial Average average unchanged
• S&P index up 2.75 points
• NASDAQ up 14 points