Overall tone->On hold->Economy to stay weak->Recognizes rates are low amid inflation risk->But no mention of acting in a timely manner->Credit strains remain high->Commodities and USD offering respite on inflation outlook. Bulk of speech dedicated to financial infrastructure and supervision.
- Although we have seen improved functioning in some markets, the financial storm that reached gale force some weeks before our last meeting here in Jackson Hole has not yet subsided, and its effects on the broader economy are becoming apparent in the form of softening economic activity and rising unemployment. Add to this mix a jump in inflation, in part the product of a global commodity boom, and the result has been one of the most challenging economic and policy environments in memory.
- We have recently extended our special programs for primary dealers beyond the end of the year, based on our assessment that financial conditions remain unusual and exigent. We will continue to review all of our liquidity facilities to determine if they are having their intended effects or require modification.