More from Fed’s Kugler: Facing potential shocks, mainly from tariffs and uncertainty

Federal Reserve Governor Kugler spoke earlier on the transmission of monetary policy, Q&A now:

• Facing potential shocks now, much related to tariffs and uncertainty

• I don’t think the public is losing confidence in us

• We have a lot of trust from the public; inflation expectations are anchored

• Uncommon for bond yields to go up and the dollar to weaken, but don’t jump to the conclusion that we are no longer a safe haven

• And I would certainly say that does not reflect on the Fed’s work

• Wages are not putting inflation pressures on the services sector

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It appears Kugler is not aware of Trump’s latest flip flop:

• Trump said had no intention of firing Fed Chair Powell (he did). Major reversal from Trump

• Trump backing away from tariffs, backing away from firing Powell – will it last?
• Trump says he has no plans to Fire Federal Reserve Chair Powell
• Trump says he is going to be very nice to China, they have to make a deal

If Trump is to be believed, and also if he does not reverse the reversals, the risk has diminished.

This article was written by Eamonn Sheridan at www.forexlive.com.