8/23, 10:31 PM (Source: TeleTrader)
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Economy in good place, despite worsened outlook - Clarida

Vice Chairman of the United States Federal Reserve Richard Clarida said the global economic outlook has worsened since the July Fed meeting, but remains "favorable" nevertheless. "Economy is in a good place now," he noted. As one of the downsides of the economy at the moment, Clarida mentioned "soft" capital spending, exports and manufacturing.

The Fed is trying to understand the financial conditions, he said, and incorporate them in its decisions, which is why he is "not dismissing the decline of the Dow," admitting that financial trends are a factor in monetary policy. Asked whether further easing of monetary policy is needed, Clarida said that the Fed strives to "put in place appropriate policies" to "sustain expansion" and acts when needed.

Turning to the issue of recession, indicated by recent yield curve inversions, the policymaker said there are "different models of recession" but that he does not think there would be one. "I don't gauge the likelihood of recession as elevated," he stressed, but warned that one needs to be vigilant to data flow. "I'm not handcuffed to yield curve, but I would not ignore it either," he underlined.

Breaking the News / GG