Fed's Fischer says downside risks abroad 'noticeably smaller'
Comments from Stanley Fischer
- China's economy appears to be on 'more solid footing'
- Emerging markets better able to withstand Fed hikes
- Spillovers should be manageable
- Brexit hasn't led to significant market turmoil
- Market reaction to Dec and March hikes 'seems benign'
- Expects US policy normalization will be gradual
- Full text
Key quote: "I expect that U.S. policy normalization will be gradual under likely scenarios for the evolution of output and inflation. A gradual and ongoing removal of accommodation seems likely both to maximize the prospects of a continued expansion in the U.S. economy and to mitigate the risk of undesirable spillovers abroad."
In the great tradition of markets humbling policymakers, a risk from abroad will now hammer the US economy and markets.