Esther George, president of the Kansas City Federal Reserve, has reiterated the Fed’s commitment to ameliorating inflation, suggesting that monetary policymakers are less concerned with the effect of rate hikes on equity values despite the recent sell-off in the stock market.
When asked by CNBC’s Steve Liesman about the recent bearish turn in the stock market, George remarked that such a downturn was a predictable consequence of the central bank’s policy of interest rate hikes.
“I think what we’re looking for is the transmission of our policy through the market’s understanding, and that tightening should be expected,” George said. “So it’s not aimed at the equity markets in particular, but I think it is one of the avenues through which tighter financial conditions will emerge.”…