Fed's Clarida: Surprised by higher-than-expected inflation data

"If inflation were pushed to levels inconsistent with the mandate, the Federal Reserve will use tools to bring it down," Federal Reserve's Vice Chairman Richard Clarida said on Wednesday, as reported by Reuters.

Additional takeaways

"Downside risks include vaccination rates, variants, slower recovery globally."

"Upside risks include pent-up demand with fiscal support, accumulated savings."

"There is a risk we could see more persistent imbalances between demand and supply."

"It may take longer to reopen the economy than to shut it down."

"Surprised by higher-than-expected inflation data."

"It's important that pressures to inflation be transitory; if not, will use tools."

"April jobs report was a downside surprise."

"Will be looking close at labor force participation."

"If participation moves back to pre-pandemic levels, will be less persistent upward pressure on wages."

"Recent rise in productivity growth is probably transitory."

"There's no one answer to why people may be reluctant to return to work."

"Women have left work due to healthcare responsibilities, childcare; there are also concerns around the virus."

Market reaction

The greenback showed no immediate reaction to these remarks and was lat seen gaining 0.12% on the day at 90.27.