Fed Members’ latest comments

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Members of the Federal Reserve Date: Comments: Date: Comments: Date next scheduled to speak
Janet Yellen

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17/06/15 In her post June meeting Q&A Yellen refused to be pinned down to saying rates would go up this year, saying it depended on how well the economy performed.  She said: “an increase is certainly possible this year,” which was marginally more doveish than her March comments that a rate rise “later this year”would be “warranted”.  She thought the labour market still too weak, with number of part-timers too high and labour participation too low. Whilst the Fed had witnessed “tentative” signs of wage growth they were not definitive. Consumer Spending had bounced back from its winter slump. As for inflation: downward pressures had eased, but Fed was is still concerned. The FOMC would decide on a rate hike on a “meeting-by-meeting basis”. 10/07/15 No real change in stance from Yellen, who highlighted the potential impact of global shocks from Greece or China on timing for Fed hike. Outlook for inflation extremely “uncertain”. Reiterated that she had seen some “tentative signs of wage growth.”  Apart from that she reiterated much which has already been said from the Fed: that there is moderate growth, the U.S economy is fundamentally quite sound but there is room for improvement and still ‘invisible’ slack in the labour sector. July 15,16
Stanley Fischer

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23/03/15 “Fed has made significant progress towards maximum employment and price stability.” Therefore rate hike probably needed before end of year. 16/04/15 Fischer was quite hawkish, saying that after the “poor” first quarter the “rebound” was “underway”. He said there was more signs emerging every day of an economic rebound and mild wage increases, after which  Bond markets fell as expectations of an early rate hike gained traction again.  He added Fed is likely to raise interest rates at sometime in the future, and markets cannot depend on the current situation continuing forever, “or even – probably beyond the end of the year.” July 17
William Dudley

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05/06/15 Rate hike seems appropriate later in the year. Expects growth and inflation to pick up.

Labour market “still has some way to go.” However, despite recent positive NFPs.

Timing of hike largely dependent on economic data.

26/06/15 “Less worried about labour market,” compared to start of June.

If we hit 2.5% growth in Q2 and Q3 shaping up, then rate hike before the end of the year probable. “It wouldn’t shock me if we were to lift off in September, or if the data was a little soft and caused us to wait.”

Concerned about contagion from Grexit which market underestimating.

Didn’t think dollar would rise much more as economic conditions starting to “converge”.

Lael Brainard

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02/04/15 Presented a paper called: “Coming of age in the great depression.” In which he highlights how the Great Recession (2008-) generation have struggled economically compared to previous generations, but how the Fed’s accommodative monetary policy has helped the labour market and access to housing. 02/06/15 Pessimistic – warning the slow-down might be more significant-than-expected.

Rate rise will be gradual; economy presents a mixed picture; the benefits of cheap oil offset by the negative impact on oil industry;  consumer spending weak; exports would take a long time to recover from weak foreign demand and the strong dollar.

Despite this inflation seems to be firming. Needs more evidence of inflation and healing in the labour market before voting for a rise.

Charles Evans

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19/05/15 Dollar recovered after  Evans, said he could foresee a scenario in which the Fed lifted rates in June, as long as inflation expectations rose and the slow first quarter turned out to be a temporary blip. His comments varied from previous ones where he emphasized the need to wait, even if he did reiterate his personal view that rates should not be lifted until 2016. 09/07/15 Hurdle still too high to support an early hike; no harm in waiting; inflation expectations higher than they probably ought; Core PCE will probably be 1.5% by end  of 2016 (from 1.4% now); growth outlook depends on keeping rates low till mid 2016; still a way to go on labour market slack.
Jeffrey Lacker

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02/04/15 Expects Q2 pick-up in economic growth, likely lift-off in June-Sept window. Fed will still have substantial control over short-term rates once lift-off begins. Still feels there is considerable underutilization in labor markets. Measurements of employment more accurate than those of economic growth and should be watched closely in deciding lift-off date 10/04/15 Still a strong case for a June rate hike.

Lacker added there had been a “substantial amount of support for a June rate hike,” at the March FOMC, and that he did not see a problem in hiking rates and then “moving back to zero.” He further stated that if it were up to him he’d sell assets now.

Dennis Lockhart

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16/04/15 Was slightly more doveish: Poor data had taken the shine of Lockhart’s optimism that “we’ll soon see a pick-up,” and he now saw the economy as “difficult to read,” with negative factors possibly proving transitory – previously he had firmly believed they were transitory. 06/05/15 Wants to see a rise in Consumer Spending before a rate hike, but sees such a hike happening in next few months – probably September.  Expects there to be an intense focus on data in the following “days, weeks and months” and the time-frame for analysis has been dramatically “foreshortened.” Considers fall in oil and strong dollar weighing on exports as transitory.
Jerome Powell

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08/04/15 Timing and pace of rate hikes will be data dependent. No evidence of build up of “frothy” financial conditions. Favours gradual rate increases. Expects inflation to steadily rise to Fed’s 2.0% goal. Jobless rate underestimates current labour market slack. Expects labour market to continue to improve despite March payrolls. First rate lift-off could come as soon as June. Fed should look for more proof of labour market tightening. 23/06/15 Powell was more hawkish than previously, saying he saw conditions for a lift-off in September – and possibly even another one in December too. He thought the dollar and oil had broadly stabilized. Expected growth of 2.0% and saw positive signs in economy including a pick-up in wages and an up-tick in the participation rate.
John Williams

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04/05/15 Williams was very optimistic about where the economy is heading over the next couple of years. “We have gotten the national economy back to basically full strength.” Employment should move from 5.5% to 5.0%* by year’s end.

*Note: On March 23 Williams defined ‘Maximum Employment’ as 5.2%

12/05/15 Appeared to make a hawkish shift when he said: “every meeting is now on the table” – for a rate hike lift-off. July 15
Daniel Tarullo

Daniel Tarullob

04/06/15 Economy has lost momentum. May not recover from the weak 1st Q as quickly as it did in 2014.

There are “more questions at this point in 2015 than there were at this point in 2014.” Wanted to see healthier wage growth: “and we still haven’t seen that yet.”

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