Fed's Clarida: Downside risks to economy are much diminished

Federal Reserve's Vice Chairman Richard Clarida said on Thursday that he thinks downside risks to the economy are much diminished, per Reuters.

Additional takeaways

"My baseline outlook is optimistic."

"It's important to focus on getting to max employment."

"All measures of inflation that we follow are running below 2%

"We will see inflation compared to price collapse last year, as well as due to pent-up demand."

"My baseline view is that near-term moves in inflation will likely be transitory."

"Broad financial conditions remain very accommodative."

"Rise in yields since last summer reflects optimism about recovery, vaccines, fiscal support, and Fed's ability to get inflation to 2%"

"If rates move up because of strong growth, employment, it's not necessarily going to be a concern."

Market reaction

The US Dollar Index clings to daily gains around 92.70 following these remarks.