MNI BRIEF: Kugler Says Fed Retains Public Trust

Recent unusual market movements are not a sign the public is losing confidence in the Fed and it is too soon to say whether the U.S. dollar is losing its safe haven status, Federal Reserve Governor Adriana Kugler said Tuesday. 

"I don't think the public is losing confidence in us at all. In fact, we have a lot of trust from the public. I mean, the fact that inflation expectations have stayed so well anchored is very telling, right? Or how much the public understands our reaction function. The public understands our commitment to the dual mandate," she said in Q&A at an event at the University of Minnesota. 

She noted "very uncommon" correlations in markets recently, including falling stock prices, declining yields, and the depreciating dollar. "I would not want to jump to conclusions and say that that's already showing that we we may no longer be the safe haven that we used to be. I think it's too early to tell. I would not jump to that conclusion." (See: MNI INTERVIEW: Trump Accelerating Dollar Decline - Eichengreen) 

"And I would certainly not say that that reflects on our work," she added. "The uncertainty, the high levels of uncertainty we're living through, are coming from other parts of the economy," Kugler said. (See: MNI INTERVIEW: U.S. Safe-Haven Status Under Pressure - Liang)