Michelle Bowman, a member of the Board of Governors of the United States Federal Reserve, today commented on the Fed’s monetary policy, the US economy and neutral rate levels. Overall, his remarks were quite restrictive, signaling the need for a more cautious approach and likely much higher neutral rates in the United States. Despite this, and a strengthening dollar supported by yields, gold gained 0.7% today, reaching $2,650 an ounce, partly due to geopolitical tensions and technical improvements. EuropeInvasion’s the UK’s ATACMS and Storm Shadow missiles to strike Russia.
- The Fed should take a cautious approach on monetary policy. The Fed may be closer to the neutral policy rate than it currently thinks, although inflation remains a concern.
- My estimate of the policy neutral rate is much higher than before the pandemic.
- I supported the Fed’s rate cut in November because it aligns with my preference for gradual rate cuts.
- I am pleased that the Fed’s November policy statement allowed for some flexibility in deciding future adjustments.
- Progress in reducing inflation appears to have stalled. We need to be patient and cautious about what an approach to migration policy might actually mean.
- Even if we reduce inflation, prices remain higher. The Fed must be flexible. It is concerning that we are recalibrating policy but have not yet achieved the inflation target.
- October employment data likely shows an increase at the recent average pace after accounting for hurricanes, the Boeing strike and low response rates.
- I consider that there is a greater risk to the price stability mandate, although deterioration of working conditions is possible.
- The economy is strong, the labor market is near full employment, and inflation remains high.
- The sideways movement in core personal consumption expenditure inflation since May reflects increased demand for affordable housing, and inelastic housing supply.
- The unemployment rate is lower than my own estimate of full employment, and this year’s rise reflects weakening hiring.
Source: xStation5
“This content is a marketing communication within the meaning of Article 24(3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/ 92/EC and Directive 2011/61/EU (MiFID II) The marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy. within the meaning of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6 / EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Delegated Regulation (EU) 2016/958 of the Commission of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council as regards regulatory technical standards relating to technical arrangements for the objective presentation of investment recommendations or ‘other information recommending or suggesting an investment strategy and for the disclosure of special interests or indications of conflicts of interest or any other advice, including in the field of investment advice, within the meaning of Article L321-1 of the Monetary and Financial Code. All information, analyzes and training provided are provided for informational purposes only and should not be interpreted as advice, a recommendation, a solicitation for investment or an invitation to buy or sell financial products. XTB cannot be held responsible for the use made of it and the resulting consequences, the final investor remaining the sole decision-maker regarding the position taken on their XTB trading account. Any use of the information mentioned, and in this regard any decision taken in relation to a possible purchase or sale of CFDs, is the exclusive responsibility of the final investor. It is strictly prohibited to reproduce or distribute all or part of this information for commercial or private purposes. Past performance is not necessarily indicative of future results, and anyone acting on such information does so entirely at their own risk. CFDs are complex instruments and carry a high risk of rapid loss of capital due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You need to make sure that you understand how CFDs work and that you can afford to take the likely risk of losing your money. With the Limited Risk Account, the risk of losses is limited to the capital invested.”
- -
