May 13 - Federal Reserve Vice-chair Phillip Jefferson said Monday that in an otherwise healthy economy the central bank should hold steady on monetary policy until it's clear inflation is again moderating back to the 2% target.
The Fed's second-in-command noted that the generally healthy state of the economy allows him to focus on the work that needs to be done to lower price pressures. “It’s widely accepted” that clear communications enhance how effective central bank policies are because they"can affect the expected path of interest rates and financial conditions more generally,” Jefferson said, while adding sometimes attempts to communicate can have “unintended consequences.”
The public comments of officials can also muddy the waters, he said. “The diversity of viewpoints among policymakers lends itself to stimulating debates and, ultimately, better policy,” Jefferson said, adding “but in such a situation, more communication could increase rather than reduce uncertainty about our policies.”
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