“PATIENCE” is the new mantra at the Federal Reserve, less than two weeks ahead of the U.S. central bank’s first policy meeting of the new year, as officials leave little doubt they want to stop raising interest rates — at least for a while. Fed Chair Jerome Powell first used the word “patient” to describe his approach to monetary policy early this month, in words that soothed financial markets after months of volatility. Seven other policymakers have followed Powell in embracing a “patient” approach or otherwise signaling an inclination to pause the cycle of rate hikes. That follows a wait-and-see approach laid out earlier this month by several other Fed policymakers, making clear that a consensus has emerged among the 17 Fed officials who will meet Jan. 29-30. Slower global growth, a stock meltdown last quarter, and a partial U.S. government shutdown that threatens consumer confidence and spending have many of them worried about what Fed policymakers only last month called “strong” economic activity. And, they say, the economy has yet to feel the full effects of the Fed’s four rate hikes last year. “The approach we need is one of prudence, patience and good judgment,” New York Fed President John Williams said Friday, adding that if growth continues, further rate hikes could be needed “at some point.” But for now, he said, the tail winds that propelled the U.S. economy for most of last year have “lost their gust.” Mary Daly, who used to work for Williams when he ran the San Francisco Fed and now is president of that regional bank herself, is “leaning toward pausing for a while” to see how the economy progresses, the Washington Post reported Friday, in remarks confirmed by a bank spokesman. Similarly, Dallas Fed President Robert Kaplan said the Fed’s “patience” should run a quarter or two. Even Kansas City Fed President Esther George, who made her name as the lone backer of rate hikes when most policymakers opposed them, made the case for a pause on rate hikes. (SD-Agencies) |