SAN FRANCISCO (Reuters) – The U.S. Federal Reserve will not make policy based on day to day developments in U.S.-China trade policy or on Britain’s exit from the European Union, a U.S. central banker said on Thursday, in part because businesses do not make their decisions that way either.
“For me, it’s not about the ups and downs on a given day, or even within a given day, around negotiations whether on trade, or on Brexit or anything else, because those tend to move around quite a bit,” New York Fed President John Williams said at a conference on monetary policy and global uncertainty at the San Francisco Fed.
Monetary policy can take a year to work its way into the economy, he said, so the Fed has to take a longer view.
“Even if there’s some kind of resolution on a particular issue, I think this uncertainty factor, which we are hearing from everywhere from business people across the country, that’s unlikely to turn on a dime,” he said.
“It’s going to require some time of people thinking they have certainty around the trade environment, around the geopolitical environment, so they can make those longer-term business decisions.”
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