Federal Reserve Vice Chairman Richard Clarida expressed a cautious view Tuesday about how the central bank should proceed in raising interest rates.
The Federal Open Market Committee’s newest member, in a speech delivered to bankers in New York, emphasized the importance of policymakers being “data dependent” in how they approach future moves.
“A monetary policy strategy must find a way to combine incoming data and a model of the economy with a healthy dose of judgment — and humility! — to formulate, and then communicate, a path for the policy rate most consistent with our policy objectives,” he said in prepared remarks.
Assessing the current state of interest rates, Clarida said the FOMC, which sets Fed monetary policy, is “much closer” to a so-called neutral level that is neither stimulative nor restrictive than it was when the rate-hiking cycle began in December 2015.
“How close is a matter of judgment, and there is a range of views on the FOMC,” he said.
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