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“I believe that monetary policy is in a good place and should continue to support sustained growth, a strong labor market, and inflation running close to our symmetric 2 percent objective,” Fed Vice Chairman Richard Clarida said in remarks prepared for delivery in New York.
Policymakers cut interest rates three times at consecutive meetings between July and October, setting the benchmark federal funds rate at a range between 1.5 percent and 1.75 percent, a decision that Clarida described as “well timed” in helping keep the record-long economic expansion insulated from a global growth slowdown.
The U.S. economy is beginning the year in a good place, Clarida said, pointing to record-low unemployment, which is at a half-century low, solid growth and stable inflation.
“As long as incoming information about the economy remains broadly consistent with this outlook, the current stance of monetary policy likely will remain appropriate,” he said.
In December, officials voted unanimously to hold the rate steady — and indicated they had no intentions to reverse those cuts anytime soon. Minutes from the Federal Open Market Committee’s Dec. 11.-12 meeting published last week reinforced that notion, with most policymakers agreeing that interest rates will be on hold for “a time.”
Still, officials still saw some downside risks to their assessment and said they were prepared to move rates up or down as necessary.
“There are some indications that headwinds to global growth may be beginning to abate,” Clarida said.