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