It's not just Bernanke with the jabber-jaw. Check out the handful of these Fed Clones talking shop with reporters.
MONTROSE, Colorado (Reuters) - Federal Reserve officials voiced concern about inflation on Tuesday, but also expressed doubts on future policy, emphasizing uncertainty at the top of the U.S. central bank as to how much more it needs to hike interest rates. Federal Reserve Bank of St. Louis President William Poole made hawkish remarks in a newspaper interview about inflation, continuing a recent rash of pointed comments that have shortened the odds among investors of another rate increase.
But several other top Fed officials stressed that monetary policy takes time to make itself felt, indicating patience in waiting to see how the 16 consecutive quarter-percentage point hikes since June 2004 impact U.S. growth.
Due to the lags, Federal Reserve Bank of Kansas City President Thomas Hoenig said that it was premature to judge if the Fed was "behind the curve" in respect to inflation.
"When I look at the inflation expectations, I have seen some movement up, but I've seen that in the past. So I think it is frankly too early to tell in terms of whether we have this issue of being behind the curve," Hoenig said following a speech here hosted by the Kansas City Fed's Denver branch.
"I think we need to be watchful and alert. But I think at this point we have only recently moved the policy rate to the 5 percent level. We know that monetary policy acts with a lag, we know that those effects will still be months ahead of us, and so we'll see how this moves," he added.
Federal Reserve Board Governor Susan Bies, addressing a bankers group in California, also emphasized the lagged impact of rate rises.
"We're in the range (on interest rates) where different models say we should be for the economy. As a result, we are in a period where we're in transition and transition means we don't exactly know where we are going to stop," she said.
"Part of the challenge is that monetary policy works with a lag so the 16 (rate) increases we've had so far are still feeding their way through the economy and we're beginning to see some of the impacts happening in real estate markets."
Recent economic data have backed up anecdotal reports of a gradual cooling in the buoyant U.S. housing market, which officials think will restrain spending and bring U.S. growth from a 5.3 percent pace in the first quarter to more sustainable levels of around 3.5 percent.
But both Hoenig and Bies noted that inflation rates were at the top end of their comfort range.
Bies also told the banking group the Fed faced the question of whether it had done enough so that core inflation, which excludes food and energy prices, was poised to move lower.
She told reporters after her remarks she did not know the answer to that question.
"I don't know how many more moves we need or the pace we need to move," she said. "As we get to the turning point, there's different viewpoints right now."
HAWKS EYE INFLATION
St. Louis Fed chief Poole, in an interview with The Wall Street Journal, made the most pointedly hawkish comments of the day, hinting that the Fed may have to become restrictive in its policy setting to keep inflation at bay.
"If inflation turns out to exceed our expectations, our target range, I do not believe we can count on a slowing economy to bring inflation down, by itself, quickly," he said.
Poole is a noted policy hawk whose preferred rate of inflation is zero -- properly measured.
He noted that the investors' expectations of inflation, judging from the behavior of inflation-protected Treasury bonds or TIPS (Treasury Inflation Protected Securities), have risen about 0.2 percentage point this year.
"It's not a huge number, but from my perspective it's going in the wrong direction" because inflation is already "at the upper end, of what I would like to see," he said.
As a result, Poole recommended raising interest rates a bit more than enough to curb inflation expectations if necessary.
"We need to have an upside bias to our setting of the federal funds rate," he said. "And I think it would be a lot safer strategy to err on the side of going a little too far, in the expectation that when that became clear, you could back off," Poole added.
Policymakers have long stressed that differences of opinion would emerge once the Fed got near to the end of its tightening cycle and this was on show in the latest discount rate minutes of the 12 regional Federal reserve banks, released on Tuesday.
"Overall, the directors agreed that a further tightening in monetary policy was appropriate, although several noted that the federal funds rate was near the upper end of what could be considered a neutral range," the minutes said.
http://news.yahoo.com/s/nm/20060606/bs_nm/economy_fed_dc_2
MONTROSE, Colorado (Reuters) - Federal Reserve officials voiced concern about inflation on Tuesday, but also expressed doubts on future policy, emphasizing uncertainty at the top of the U.S. central bank as to how much more it needs to hike interest rates. Federal Reserve Bank of St. Louis President William Poole made hawkish remarks in a newspaper interview about inflation, continuing a recent rash of pointed comments that have shortened the odds among investors of another rate increase.
But several other top Fed officials stressed that monetary policy takes time to make itself felt, indicating patience in waiting to see how the 16 consecutive quarter-percentage point hikes since June 2004 impact U.S. growth.
Due to the lags, Federal Reserve Bank of Kansas City President Thomas Hoenig said that it was premature to judge if the Fed was "behind the curve" in respect to inflation.
"When I look at the inflation expectations, I have seen some movement up, but I've seen that in the past. So I think it is frankly too early to tell in terms of whether we have this issue of being behind the curve," Hoenig said following a speech here hosted by the Kansas City Fed's Denver branch.
"I think we need to be watchful and alert. But I think at this point we have only recently moved the policy rate to the 5 percent level. We know that monetary policy acts with a lag, we know that those effects will still be months ahead of us, and so we'll see how this moves," he added.
Federal Reserve Board Governor Susan Bies, addressing a bankers group in California, also emphasized the lagged impact of rate rises.
"We're in the range (on interest rates) where different models say we should be for the economy. As a result, we are in a period where we're in transition and transition means we don't exactly know where we are going to stop," she said.
"Part of the challenge is that monetary policy works with a lag so the 16 (rate) increases we've had so far are still feeding their way through the economy and we're beginning to see some of the impacts happening in real estate markets."
Recent economic data have backed up anecdotal reports of a gradual cooling in the buoyant U.S. housing market, which officials think will restrain spending and bring U.S. growth from a 5.3 percent pace in the first quarter to more sustainable levels of around 3.5 percent.
But both Hoenig and Bies noted that inflation rates were at the top end of their comfort range.
Bies also told the banking group the Fed faced the question of whether it had done enough so that core inflation, which excludes food and energy prices, was poised to move lower.
She told reporters after her remarks she did not know the answer to that question.
"I don't know how many more moves we need or the pace we need to move," she said. "As we get to the turning point, there's different viewpoints right now."
HAWKS EYE INFLATION
St. Louis Fed chief Poole, in an interview with The Wall Street Journal, made the most pointedly hawkish comments of the day, hinting that the Fed may have to become restrictive in its policy setting to keep inflation at bay.
"If inflation turns out to exceed our expectations, our target range, I do not believe we can count on a slowing economy to bring inflation down, by itself, quickly," he said.
Poole is a noted policy hawk whose preferred rate of inflation is zero -- properly measured.
He noted that the investors' expectations of inflation, judging from the behavior of inflation-protected Treasury bonds or TIPS (Treasury Inflation Protected Securities), have risen about 0.2 percentage point this year.
"It's not a huge number, but from my perspective it's going in the wrong direction" because inflation is already "at the upper end, of what I would like to see," he said.
As a result, Poole recommended raising interest rates a bit more than enough to curb inflation expectations if necessary.
"We need to have an upside bias to our setting of the federal funds rate," he said. "And I think it would be a lot safer strategy to err on the side of going a little too far, in the expectation that when that became clear, you could back off," Poole added.
Policymakers have long stressed that differences of opinion would emerge once the Fed got near to the end of its tightening cycle and this was on show in the latest discount rate minutes of the 12 regional Federal reserve banks, released on Tuesday.
"Overall, the directors agreed that a further tightening in monetary policy was appropriate, although several noted that the federal funds rate was near the upper end of what could be considered a neutral range," the minutes said.
http://news.yahoo.com/s/nm/20060606/bs_nm/economy_fed_dc_2
Spaf said:
JMHO
You really did a great job.
