“If foreign growth is weaker than anticipated, the consequences for the U.S. economy could lead the Fed to remove accommodation more slowly than otherwise.”
The most eye-catching comments from the latest remarks from Fed Officials are the ones that include concern about foreign economies (read: Europe) as it relates to the future of interest rates. If Janet and the doves were looking for cover for their Lower for Longer posture, they need only look across the Atlantic.
The above quote from Vice Chair Fischer makes it clear that the fragility of the global economy is now a third key, if unofficial, input to their mandate – in addition to US inflation and employment.
This is a new wrinkle.