Fed's George Suggests She's Not Ready to Cut Rates
July 17 2019 - 3:11PM
Dow Jones News
By Michael S. Derby
Federal Reserve Bank of Kansas City President Esther George said
Wednesday she's prepared to be flexible, but she doesn't yet see
the case for a cut in interest rates later this month.
"When I look at the current settings for monetary policy, my own
outlook suggests we will continue to see growth in the economy
around or slightly above the trend rate of growth, we see an
unemployment rate at a 50-year low and continued job gains as
recently as the most recent employment numbers," with positive wage
growth for workers, Ms. George said in a speech in Kansas City,
Mo.
"Across all of these parameters, inflation has remained low and
stable," the official added. "So for me that suggests we are in a
good range in terms of thinking about monetary policy," Ms. George
said.
The policy maker did acknowledge that risks to the outlook have
risen, mostly from slowing global growth and trade policy. But
currently it isn't clear whether any of those risks are actually
slowing the economy. Ms. George also noted that while business
investment has weakened, that has happened before in this expansion
without derailing the expansion.
"To this point I think the data's come in pretty positively" in
support of the expansion moving forward, Ms. George said.
The veteran central banker, who is also a member of the
rate-setting Federal Open Market Committee, spoke as the July 30-31
policy meeting approaches. Fed officials are broadly expected to
lower its benchmark rate from the current targeted range of 2.25%
to 2.50%. They are expected to act to counter inflation pressures
that remain well short of their 2% target, and to ensure rising
uncertainty doesn't derail continued growth.
Financial markets are fully on board with a Fed rate cut.
Ms. George said she is prepared to adjust her monetary-policy
outlook "should we realize some of these downside risks." But her
speech indicated that these risks are as of now unrealized,
obviating the need for a monetary policy response.
Write to Michael S. Derby at michael.derby@wsj.com
(END) Dow Jones Newswires
July 17, 2019 15:56 ET (19:56 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.