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Federal Reserve (Fed) Bank of Philadelphia Patrick Harker said on Friday that the US central bank has efficiently navigated a challenging economy over the past few years.   Key quotes Monetary policy is likened to driving a bus – need to balance speed.  Maximum employment involves job quality, not just quantity.  Philadelphia Fed conducts research beyond monetary policy. Importance of both “hard” and “soft” data in decision-making. Fed plays a crucial role in bank supervision and financial stability. Fed is exploring AI and quantum computing impacts on finance.  There is a risk that the inflation decline could stall.  There is a risk that the labor market could soften.   Market reaction The US Dollar Index (DXY) is trading 0.06% higher on the day at 100.80, as of writing. Fed FAQs Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback. The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who…

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Filed under: News - @ September 23, 2024 12:32 am