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A hawkish New York Fed President John Williams said the Fed has reached its objectives as well as it ever has and that the US economy was on track to be the longest expansion ever.


Fed williams

Willams speech comes after Federal Reserve President last week took a decidely more dovish tone which in turn ignited the US stockmarkets to rally over 5%. 

Highlights

  • Expect US economy to continue to grow at strong rate of 2.5% next year, making it the longest US expansion ever
  • Expects price inflation to move a bit above 2%, no sign it will rise too high
  • US economy overall in really good shape
  • Expect further gradual rate hikes will be appropriate
  • Fed has reached its objectives as well as it ever has
  • Labor is quite strong and healthy 

“Given this outlook I describe of strong growth, strong labor market and inflation near our goal - and taking into account all the various risks around the outlook - I do continue to expect that further gradual increases in interest rates will best foster a sustained economic expansion and a sustained achievement of our dual mandate,” Williams told reporters.

In the past Williams said the Fed might decide to drive rates into restrictive territory if the economy remains strong and inflation is at or above the Fed's 2% target. It is fair to say "fed speak" has been double speak or banal at best lately but Williams comments are of interest as he is a voting member this year and will take over the leadership of the New York Fed later this month. He had expected that the Fed might roughly get to neutral after three more rate hikes.

Source: Reuters

From The TradersCommunity Research Desk

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