Fed vice chair says US economy is strong, but uncertainty has risen
Federal Reserve Vice Chairman Richard Clarida on Thursday lauded the strength of the U.S. economy despite an increase in uncertainty from a slowdown in the global economy.
“The U.S. economy is in a good, good place,” he said during an exclusive interview on "The Claman Countdown” Thursday. "We have a solid growth rate. We have a strong labor market. Inflation is stable."
Separately, New York Fed President John Williams also signaled a dovish tone. The combination helped push U.S. stocks higher for the session, reversing earlier declines.
In the first quarter of 2019, the economy beat expectations and grew at an annual rate of 3.2 percent, according to the Commerce Department.
Clarida, the No. 2 man at the Fed and a voting member, said the central bank will act appropriately to put in place policy to sustain a strong economy and stabilize the inflation target rate.
“The global economies slowing, business investment has been soft. There [are] disinflationary headwinds abroad and these uncertainties are something that we talked about in our June meeting. We’ll talk about them again in July,” he said.
The Core Personal Consumption Expenditure Price (PCE) index, which reflects changes in the prices of goods and services purchased by American consumers, ticked up to 1.6 percent in May.
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Clarida said the core PCE index has been moving away from the Fed’s 2 percent target rate and is a consideration the central bank will discuss in its July meeting.
“An important part of monetary policy is not only setting policy for the baseline but also doing risk management considerations,” he said.