Federal Reserve\u00a0(Fed) Bank of Chicago President Austan Goolsbee said\u00a0late Thursday that September\u2019s Fed meeting remains open for action. Goolsbee further stated that the US central bank has been getting mixed messages on the economy.<\/p>\n
Key quotes<\/p>\n
\nSeptember FOMC meeting is a live meeting.<\/p>\n
Federal Reserve has been receiving mixed signals on the economy.<\/p>\n
Recent inflation data not great.<\/p>\n
Fed still has time to take more data.<\/p>\n
Increase in services inflation a ‘dangerous’ data point.<\/p>\n
Addressing a stagflation shock is very challenging.<\/p>\n
Central bank independence is vital.<\/p>\n
Tariff increases not near completion, risk of enduring inflation.<\/p>\n
Current tariffs appear not to be one and done.<\/p>\n<\/blockquote>\n
Market reaction<\/p>\n
At the time of press,\u00a0the US Dollar Index\u00a0(DXY) was down 0.04% on the day at 98.60.<\/p>\n
Fed FAQs<\/p>\n
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates.
\nWhen prices are rising too quickly and inflation is above the Fed\u2019s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money.
\nWhen inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.<\/p>\nThe Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions.
\nThe FOMC is attended by twelve Fed officials \u2013 the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.<\/p>\nIn extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
\nIt is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed\u2019s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.<\/p>\nQuantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.<\/p>\n","protected":false},"excerpt":{"rendered":"Federal Reserve\u00a0(Fed) Bank of Chicago President Austan Goolsbee said\u00a0late Thursday that September\u2019s Fed meeting remains open for action.…\n","protected":false},"author":2,"featured_media":15784,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[79,10121,179,18,629,19,14328,17,2092,13125],"class_list":{"0":"post-15783","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-centralbanks","10":"tag-economy","11":"tag-eire","12":"tag-fed","13":"tag-ie","14":"tag-interestrate","15":"tag-ireland","16":"tag-macroeconomics","17":"tag-unitedstates"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/15783","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=15783"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/15783\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/15784"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=15783"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=15783"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=15783"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}