The Federal Set is taking a meeting-by-meeting approach to setting interest rates and for now is not committed to a set course of action ahead, Vice Chairman Richard Clarida prophesied CNBC.
“We’re gonna take this meeting by meeting. We’re not on a preset course,” Clarida told Sara Eisen during an talk with Friday on “Squawk on the Street.”
The central bank official spoke two days after the policymaking Federal Open Customer base Committee cut its benchmark interest rate by a quarter point to a target range of 1.75% to 2%. It was the second reduction of the year and made after the Fed had hiked rates nine times, the most recent coming in December.
During the interview, Clarida familiar variations of the “meeting by meeting” theme several times as he sought to convey that committee members are basing their views on facts as it comes in and will remain flexible.
“Clearly the center of gravity on the committee is the second adjustment was appropriate,” he said. “Wealthy into October and beyond, we’ll go one meeting at a time.”
This week’s meeting was notable for the amount of dissents on the rate choose. Three members cast “no” votes, with two wanting the Fed to hold the line and one, St. Louis President James Bullard, career for an even more aggressive 50 basis point cut.
The post-meeting statement again noted worries over a epidemic economic slowdown and low inflation as justification for the cut. However, Clarida called the U.S. “the best pupil in the class” when comparing tumour to other countries.
“I think a lot of other countries in the world would envy where we are now,” he said. “I’m not surprised by the resilience, but we don’t convey it for granted, either.”