Fed Officials Remain Patient about Policy Changes

The United States Federal Reserve Vice Chairman, Richard Clarida, said on Wednesday that time is yet to come for reducing the massive bond-buying or raising the historically low-interest rates.

Speaking on behalf of the central bank, Clarida told reports “we will get more data, and as we move through the year, we will be able to make a judgment on substantial further progress, but we are not there yet.”

Meanwhile, the President of the Federal Reserve Bank of Boston, Eric Rosengren also told MarketWatch that it is too early to cut the asset purchases, expecting the rise in inflation to be temporary.

“My view is that this acceleration in the rate of price increases is likely to prove temporary.”

“Many of the factors raising prices this spring are also likely to be similarly short-lived.”

“We need to have a substantial improvement for us to begin tapering. It is quite possible that we will see those conditions as we get to the latter half of the year. But right now, what we have is one really strong employment report, one quarterly GDP report. And so I think it’s premature.”

“This implies that current policy will remain accommodative until the labor market can consistently help deliver on the Fed’s 2% inflation goal,”

“There are some risks to delaying tightening policies, but there’s very significant benefits. So I think, for now, the benefits far outweigh the costs.”

Meanwhile, the President of the Federal Reserve Bank of Chicago, Charles Evans, said “I personally think the achievement of sustainable inflation averaging 2% is a lot harder than people think and so I’m not in any hurry to have that discussion,”