SOMERSET, N.J./SAN FRANCISCO (Reuters) – “Patience” is the new mantra at the Federal Reserve, less than two weeks ahead of the U.S. central bank’s first policy meeting of the new year, as officials leave little doubt they want to stop raising interest rates – at least for a while.
Fed Chair Jerome Powell first used the word “patient” to describe his approach to monetary policy early this month, in words that soothed financial markets after months of volatility.
Week - Policymakers - Powell - Patient - Approach
This week seven other policymakers followed Powell in embracing a “patient” approach or otherwise signaling an inclination to pause the cycle of rate hikes.
That follows a wait-and-see approach laid out earlier this month by several other Fed policymakers, making clear that a consensus has emerged among the 17 Fed officials who will meet on Jan. 29-30.
Growth - Stock - Quarter - US - Government
Slower global growth, a stock meltdown last quarter, and a partial U.S. government shutdown that threatens consumer confidence and spending have many of them worried about what Fed policymakers only last month called “strong” economic activity. And, they say, the economy has yet to feel the full effects of the Fed’s four rate hikes last year.
“The approach we need is one of prudence, patience and good judgment,” New York Fed President John Williams said on Friday, adding that if growth continues, further rate hikes could be needed “at some point.”
Tail - US - Economy - Year - Gust
But for now, he said, the tail winds that propelled the U.S. economy for most of last year have “lost their gust.”
Mary Daly, who used to work for Williams when he ran the San Francisco Fed and now is president of that regional bank herself, is...
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