The FOMC members, Powell and Harker, are scheduled to speak today. The speeches from the Fed members mark a long list of Fed speeches delivered during the week. So far, FOMC members Kashkari and Powell gave their speeches including the Fed Chair Janet Yellen.
Kashkari maintains dovish stance
As expected, the Minneapolis Fed President Kashkari was in favor of the dovish monetary policy. He said that the Federal Reserve started to scale back its QE operations too soon and cited this as one of the reasons for inflation staying low.
“The FOMC’s policy to remove monetary accommodation over the past few years is likely an important factor driving inflation expectations lower,” Kashkari commented on the central bank’s website.
Yellen speech – No references to monetary policy
On Wednesday, the Fed Chair Janet Yellen also gave a speech at the community banking conference hosted by the Federal Reserve Bank of St. Louis. No major references were made by the Fed chair.
Ms. Yellen has maintained the status quo, albeit suggesting during the September FOMC meeting that the Federal Reserve was looking to hike interest rates one more time.
George – Further gradual rate hikes needed
The Kansas city Federal Reserve President Esther George also spoke this week. Maintaining a hawkish stand, George said that further rate hikes, but at a gradual pace were needed. She cited the above trend rate in the economy, and the low levels of unemployment would eventually result in higher inflation.
“At this stage of the expansion, it is appropriate to move cautiously. But waiting too long risks more aggressive moves, which, history shows can invite prospects of recession,” George said last week.
The next Fed President
For the moment, the investors are focusing on who the next Fed chair will be. Jerome Powell, the Federal Reserve Governor, was said to have been interviewed by the White House and is one of the front-running candidates. Powell is said to be dovish in his outlook, which falls in line with a dovish monetary policy that President Trump favors. Powell is likely to maintain the course set by his predecessor, Janet Yellen, that rate hikes will come but only at a gradual pace.
