Amid a total of 20 appearances by members of the Federal Reserve (Fed) this week, investors looked ahead to chair Janet Yellen’s testimony to the Joint Economic Committee of Congress at 10:00AM ET (15:00GMT) on Thursday for hints on the Fed chief’s outlook for the future path of monetary policy.
In her prepared remarks, scheduled to be pre-released at 8:00AM ET (13:00GMT), Yellen was widely expected to follow the script already laid down by other Fed policymakers to signal a strong likelihood of a rate hike at the December 13-14 ,barring any unexpected shocks to the U.S. economy in the next month.
Impact from Trump election on Fed policy is null
Several Fed officials since the November 8 surprise election of Republican Donald Trump to the U.S. presidency had commented that the outcome had no immediate effect on their policy stance.
Immediately after the election results were known, San Francisco Fed president John Williams said, "I don't see any change in how I approach monetary policy.”
“It's really driven by the data," he explained.
Along the same lines, there is uncertainty over exactly what type of policies the President-elect will be able to enact once he takes office.
"The prospects for some kind of fiscal policy change have likely risen, but we don't know the timing of those policies or the form of those policies whether it's immigration or tax reform or infrastructure spending or trade policy," Cleveland Fed president Loretta Mester said late Wednesday.
Earlier this week, the head of the Dallas Fed Robert Kaplan made similar remarks:
"There are some potential policies that would be positive for GDP; there are some potential policies that might be negative for GDP; and I don’t know which ones, nor does the country."
Amid this uncertainty, the Fed clearly indicated that it would monitor the situation and the economy’s reaction to it, rather than proceeding based on speculation.
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