Fed’s Clarida: The global outlook has worsened since July meeting


Comments from Fed Vice-Chair Clarida:

  • The global outlook has worsened since July meeting
  • The economy is in a good place right now
  • Trends in financial conditions are a factor in monetary policy
  • The economic outlook is favorable
  • There are powerful disinflation pressures
  • We set policy for the US but we have to factor in the global economy
  • Capital spending, exports and manufacturing are soft but the top line look is good
  • We take our decisions one meeting at a time, as we indicated at our last meeting, we will do what’s necessary to sustain expansion
  • We need to take account into where the economy will be in 2020
  • Domestic data has been pretty good since July meeting
  • I don’t gauge the likelihood of recession as elevated but we need to be vigilant to data flow
  • Contacts say uncertainty about trade is having an effect on investment
  • My best guess is that at this time next year, the economy will be at or above trend growth

He was upbeat about the US economy. He certainly didn’t sound like someone who wants to cut 3-4 more times but it’s clear that he’s prepared to lower rates 1-2 times.


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