INSUBCONTINENT EXCLUSIVE:
And when the New York Fed itself spoke up later to clarify his remarks, investors were again all ears.
In fact, as the US central bank nears
what is expected to be its first rate cut in a decade, global markets are hanging on to every clue about the upcoming decision to an unusual
Investors are trying to gauge whether policymakers are seriously worried about a sharp economic downturn or simply want to insure against
that possibility.
One reason for investor confusion stands out
Fed Chair Jerome Powell has set the table for an interest-rate cut but has failed to win consensus why one is needed
Policymakers in recent weeks have sketched out rate-cut rationales ranging from bond market behaviour to low inflation to the need to boost
Some have also suggested they do not see the need for a rate cut in the first place, as Boston Fed President Eric Rosengren did on Friday
So
2 at the policy-setting table, appeared to provide some clarity, traders jumped on it.
US stocks and bonds and futures contracts tied to the
Fed's policy rate rallied on Thursday, milliseconds after remarks from Williams that appeared to suggest an appetite for forceful rate cuts
Stretching back at least five years as a policymaker he has repeatedly used similar phrasing to describe how the Fed should behave when
interest rates are near zero.
But investors now are listening extremely closely.
Markets have long been expecting the Fed to cut rates at
On Friday Bullard again said he supports a quarter-point cut.
Futures market odds of a 50-basis-point cut at the July meeting soared to 71
Tool.
President Donald Trump, who has repeatedly castigated the Fed for raising rates, also weighed in
economic growth.
Williams has not said the Fed raised rates too fast or too early, and his record of remarks and policy votes shows he
their communication is not pitch-perfect
Any selloff could worsen financial conditions and increase the risk of a bad outcome for the economy.
The New York Fed did not comment on
the market reaction or the comments by Trump