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Fed's Brainard warns against moving too quickly on rate hikes

Economic progress continues in the U.S., but its central bank would be wise to continue keeping policy loose, Fed Gov. Lael Brainard said in a closely watched speech Monday.

Amid market concerns that the Fed was about to resume its rate-hiking cycle, Brainard offered instead cautionary tones against moving too fast. In particular, she remains concerned about the impact that global difficulties will have on the U.S. economy.

Still-muted inflation and uncertain developments ahead "counsels prudence in the removal of policy accommodation," she said, according to prepared remarks she was to deliver to The Chicago Council on Global Affairs. "I believe this approach has served us well in recent months, helping to support continued gains in employment and progress on inflation."

Specifically, she pointed to emerging markets and China in particular as areas of worry.

"Foreign consumption and investment are weak, while foreign demand for savings is high, along with an elevated demand for safe assets," Brainard said,

"Downside risks are also present in emerging market economies, where growth has slowed rapidly in recent years," she added. "Most importantly, China is...


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