Fed's George: Fed won't react if inflation tips over 2%

"The Federal Reserve is quite able to rein in inflation; the questions are always around at what point and how much," Kansas City Federal Reserve Bank President Esther George said on Tuesday, as reported by Reuters.

Additional takeaways

"Will have to think about the sustainability of fiscal debt in the future but the focus right now should be short-term."

"If inflation tips over 2%, the Fed won't react to that."

"3.5% unemployment rate will be a marker for the Fed as it watches labor market unfold."

"Thinking about how low employment can go will be a function of how strong the economy can come back."

"Will be watching for implications of new administration's policies on employment, inflation, long-run growth."

Market reaction

The US Dollar Index extended its slide after these comments and was last seen losing 0.3% on a daily basis at 90.20.