Uncertainty About the Economic Outlook Remains Extraordinarily High says NY Fed Williams

The New York Fed president John Williams, who is a voting member was speaking to a symposium at Princeton University continued with his hawkish tilt. He said the process of reducing the size of the Federal Reserve’s balance sheet could start at the next meeting, May 3 & 4. He also focused on familiar themes saying and risks to the inflation outlook are particularly acute.

The Fed holds around US$9 trillion of Treasury bonds and mortgage-backed securities.

“These actions should enable us to manage the proverbial soft landing in a way that maintains a sustained strong economy and labor market”

Williams did add a positive hope in his speech.

Federal Reserve Bank of New York President John Williams spoke to a symposium at Princeton University’s Griswold Center for Economic Policy Studies.

Discussion Highlights

  • High inflation (which is pinging around 6.5% is over 3x the Fed’s 2% target) is the Fed’s greatest challenge
  • “Uncertainty about the economic outlook remains extraordinarily high, and risks to the inflation outlook are particularly acute”
  • Expects that rate increases and balance sheet reduction will help reduce inflation to around 4% this year
  • Then “close to our 2% longer-run goal in 2024”
  • “These actions should enable us to manage the proverbial soft landing in a way that maintains a sustained strong economy and labor market”
  • “Both are well-positioned to withstand tighter monetary policy.”

Today’s comments were in along with comments that Fed officials are focused on reducing inflation without wrecking the economy.

Source: Reuters

From The TradersCommunity US News Desk

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