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It is too soon for the Federal Reserve to change its forward guidance, or what it tells the market about the future path of interest rates, said Kansas City Fed President Esther George on Wednesday.
In a series of interviews ahead of the central bank’s Jackson Hole economic symposium this week George said it was premature for the Fed to decide “what else does the economy need.”
Since the late spring, Wall Street economists have targeted the Fed’s Sept. 16-17 meeting as a likely time for the central bank to refine its communication with the market, but George’s comments, combined with prior remarks from other top Fed officials, suggest this will be put off until later this year.
“I think we are beginning to see signs of a recovery, we’re beginning to see where the economy has shortfalls, and where it may be doing ok, but that is going to take some time,” George said, in an interview with Bloomberg News.
Thinking about what further steps might help the economy has been a “useful discussion,” but “whether to activate those things is something we’ll be debating,” she added.
In an interview with CNBC, George said her baseline forecast was for the economy to continue to improve over the rest of the year. She said the path of the economy depended on the course of the coronvirus.
She called the possibility of a double-dip recession was “an important risk.”
