I mentioned an upcoming Lael Brainard speech a week ago. She's the Federal Reserve Governor to watch because when she gets onboard policy, it shows consensus. And this week she gave that speech, whose very title suggests a regime shift in US monetary policy. The full "Speech by Governor Brainard on navigating monetary policy as headwinds shift to tailwinds " is on the Fed's website. But I am going to give you a play by play here and tell you what it means for policy. The short answer is it means the Fed will be more aggressive in tightening going forward. The analysis follows below.
The Headwinds Policy Regime of Janet Yellen
Let's put post-crisis monetary policy in the US into five distinct phases. Each of these represents monetary policy regime shifts, like the one we are now seeing.
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.