Back on March 1st, I told you to think of "Lael Brainard as the catalyst for Fed regime shift". Here's why:
Back in late 2015, she and Fed Governor Dan Tarullo expressed caution about raising interest rates. And as the Fed increased the Fed Funds rate, their cautious stance became Fed policy. Then in mid-2017, as Powell laid out the rules for quantitative tightening, Brainard favoured rate hikes. That signalled the Fed moving in a hawkish direction.
Powell has built consensus for a regime shift at the Fed. And Lael Brainard has been critical in making this happen.
Brainard's latest comments on the Fed Funds rate
So, Brainard's latest speech is critical to understanding where the Fed is heading. She's titled it "What Do We Mean by Neutral and What Role Does It Play in Monetary Policy?". Her...
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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.