WASHINGTON, May 7 (Xinhua) — U.S. Federal Reserve (Fed) Vice Chairman Richard Clarida on Tuesday defended the Fed’s monetary policy amid growing market speculation, saying it’s in “a good place.”
In an interview with Bloomberg TV, Clarida said most members of the Federal Open Market Committee (FOMC), the Fed’s policy-making body, see the baseline rate unchanged this year.
In response to a question about cutting interest rates, Clarida said, “I don’t think we’re at that place now.”
In his earlier remarks, the Fed vice chairman said the U.S. economy is operating “at or very close” to the Fed’s dual-mandate objectives of maximum employment and price stability, and that the current policy rate is in the range of FOMC participants’ estimates of “neutral.”
U.S. President Donald Trump and other White House officials have recently urged the Fed to cut interest rates, citing soft inflation data. “I think it might be time for us to consider lowering interest rates,” Vice President Mike Pence told CNBC on Friday. “We just don’t see any inflation in this economy at all.”
Excluding the volatile energy and food prices, the core personal consumption expenditures (PCE) price index, a preferred inflation gauge by the Fed, was up 1.3 percent in the first quarter, still below the central bank’s target of 2 percent.
After concluding its policy meeting last week, the Fed left interest rates unchanged and downplayed concerns about weak inflation, as the central bank saw no need to alter its “patient” approach on interest-rate moves.
“Inflation is low, which gives us the ability to be patient and we do expect it to move up and we want it to move up to 2 percent,” Fed Chairman Jerome Powell said at a press conference, arguing that the recent weakness in price pressures is likely “transient.”
“We think that our policy stance is appropriate at the moment. And we don’t see a strong case for moving in either direction,” Powell said.
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