Federal Reserve Vice Chairman Stanley Fischer said Monday that it is too early to judge what the turbulence in financial markets means for the central bank’s plans to tighten monetary policy.
“At this point, it is difficult to judge the likely implications of this volatility,” Fischer said in a short speech Monday in New York.
If financial conditions continue to get worse, it could signal a global economic slowdown, which could force the Fed to alter its plans, he suggested.
But, he cautioned, we “have seen similar periods of volatility in recent years that have left little permanent imprint on the economy.”
Falling stock and other signs of rising stress in financial markets in January have raised concerns that the Fed may have made a mistake by raising its interest rate target from zero at its December meeting.
Fischer’s speech Monday was the first time a member of the Fed’s Board of Governors has commented in public on the market volatility since the Fed’s January meeting.
