The U.S. economy is well-positioned at the start of 2020, with unemployment at a 50-year low, “solid” GDP growth and wages rising in line with productivity growth, Federal Reserve Vice Chairman Richard Clarida said today in New York. Amid these positive signals, “we are not seeing any evidence to date that a strong labor market is putting excessive cost-push pressure on price inflation,” he explained.
“The shift in the stance of monetary policy that we undertook in 2019 was, I believe, well-timed and has been providing support to the economy and helping to keep the U.S. outlook on track,” Clarida said. “I believe that monetary policy is in a good place and should continue to support sustained growth, a strong labor market, and inflation running close to our symmetric 2% objective.”
Clarida repeated the Fed’s message that the Federal Open Market Committee will continue to proceed on “a meeting-by-meeting basis” and remain flexible in addressing economic conditions. He added that the Fed “stand[s]ready” to conduct open market operations as needed to relieve pressures in the repo market and maintain the federal funds rate in its target range.