Fed VC Clarida supports the gradualist policy trajectory
Fed VC Clarida supports the gradualist policy trajectory in his speech on Data Dependence and U.S. Monetary Policy. Such a stance allows the FOMC to accumulate more information, as the Fed updates its estimates of the "uncertain" neutral rate. He also stated that rates are "much closer to the vicinity" of neutral than when the Fed began hiking. He noted that rate hikes are still necessary, but he said risks have become more symmetric, The Fed should meet its policy objectives on a "sustained basis." He sees a robust economy and a healthy labor market, while U. Michigan inflation expectations are at the lower end of stability, while TIPS are show expected PCE inflation somewhat less than 2%. He comments lean to the dovish side.