The New York Fed president John Williams, hwo is a voting member continued with his hawkish tilt of late. His comments roiled financial markets somewhat with selling in the more speculative names such as those in Russell 2000 index. He also focused on familiar themes saying supply constraints are a major factor on the labor market and supply chain bottlenecks.
“We definitely have seen a pickup in underlying inflation in the U.S. that we’ll be studying carefully,” Williams said during a virtual panel.
- We are seeing broader based increases in inflation
- Even after taking into account basic facts, we have seen a pickup in underlying inflation in the US
- Long-run inflation expectations reversed earlier declines and are at levels seen in 2013 to 2014
- Supply constraints are a major factor on the labor market and supply chain bottlenecks
- Feds framework is well suited for this because it starts up from the point of making sure inflation expectations are anchored at 2%
- The economy is going back
- higher inflation is making it more expensive to put food on the table
- Fed’s focused on making sure there is a strong healthy economy with low and stable inflation
- The rapid development in the crypto currency space and stable can provides opportunities for positive effects, but at the same time financial stability risks can be identified in that space
- Cyber risks to the financial system are not going away
Just last week Williams said there are segments of the labor force that are more protected against inflation and others less so after the latest jobs report. Williams pointed out that people on fixed incomes are less protected against inflation.
Today’s comments were in along with his comment that Fed officials are focused on inequality and equitable growth because they are important to the economy.
From The TradersCommunity US News Desk