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.
- 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.
From The TradersCommunity US News Desk