U.S. Fed could be more "accommodative" if economy gets weaker, Fed official says

Source: Xinhua| 2019-05-31 14:31:13|Editor: Li Xia
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WASHINGTON, May 30 (Xinhua) -- Richard Clarida, vice chair of the U.S. Federal Reserve (Fed), said on Thursday that the central bank could make its policy more accommodative if economic status gets worse.

"If we saw a downside risk to the outlook, then that would be a factor that could call for a more accommodative policy. So that's definitely something in the risk-management area that we would think about," Clarida said during a speech in New York.

The vice chair said Fed would reconsider its policy stance when inflation, economic and financial outlook changes.

"If the incoming data were to show a persistent shortfall in inflation below our 2% objective or were it to indicate that global economic and financial developments present a material downside risk to our baseline outlook, then these are developments that the Committee would take into account in assessing the appropriate stance for monetary policy," he said.

The committee that the vice chair mentioned is the Federal Open Market Committee, which is Fed's monetary policy making body.

"The U.S. economy is in a very good place, with the unemployment rate near a 50-year low, inflationary pressures muted, expected inflation stable, and GDP growth solid and projected to remain so," Clarida said.

However, unsolved trade disputes are still hammering the sentiment of the market, creating more downside risks to the U.S. economy. Dow and S&P 500 fell almost 5 percent compared with the beginning of May, while Nasdaq dropped about 6 percent.