As markets fret, Fed officials reject the idea of rising financial stability risks  

 

• Federal Reserve officials are pushing back on investors' mounting concerns that the U.S. central bank's aggressive campaign to counter high inflation is setting the stage for a market crack-up.
• Central bankers' confidence is countered by wide-ranging fears among market participants who see bond market liquidity strains, damaging asset price declines as well as a range of problems in markets abroad. Some see this landscape as dire enough to call for the Fed to slow or even consider stopping its interest rate increases, something officials have so far shown no appetite for as they contend with the worst inflation surge in 40 years.
• "We have to be monitoring things in the financial markets, and we have to be looking for vulnerabilities as you're increasing rates," Cleveland Fed President Loretta Mester told reporters on Tuesday, especially in an environment where all the world's major central bankers are moving in the same direction toward tighter monetary policy.

(Source: Reuters)