Fed’s Hammack: The US economy is very resilient

Beth Hammack, president of the Federal Reserve Bank of Cleveland, said that the central bank should exercise patience in its monetary policy amid high uncertainty and added that she would not rule out making adjustments by June if the data warranted action.

Key highlights

• Uncertainty is really weighing on businesses and their planning.
• We don’t know yet what uncertainty and trade policy will do to economy.
• Doesn’t have basecase right now, is looking at scenarios for economy.
• Lots of different scenarios ahead of economy.
• Fed needs to be patient, it’s too soon to change rates.
• Seeing good things in hard data, softer data is an issue.
• Fed will move quickly if it needs to.
• When it’s clear where economy is going Fed will act.
• Watches markets for their impact on real economy.
• Over recent weeks markets clearly volatile but functional.
• US economy is very resilient.
• With economy, many different paths lie ahead.
• Enters every FOMC meeting with open mind.
• Fed could move in June if data is clear about economy’s state.
• Lower stocks, bonds, dollar trade should be monitored.
• Fed will focus on data while making policy.
• It’s possible Trump’s view on Fed Chair could affect data.
• Independent central banks deliver better outcomes, markets recognise this.