Fed's Williams: Appropriate to start reducing pace of asset purchases this year

Eren Sengezer FXStreet

"Assuming the economy continues to improve as anticipated, it could be appropriate to start reducing the pace of asset purchases this year," New York Federal Reserve President John Williams said on Wednesday, per Reuters.

Additional takeaways

"Even after the asset purchases end, the stance of monetary policy will continue to support a strong and full economic recovery."

"Want to see more improvement in labor market before he is ready to say substantial further progress standard was met for maximum employment goal."

"Even with the strong pace of growth we are seeing, a full recovery from the pandemic will take quite some time to complete."

"There are indications that the spread of the Delta variant is weighing on consumer spending and jobs."

"It's clear there has been substantial further progress on the Fed's inflation goal."

"Expecting real GDP to increase by around 6% this year."

"Expecting inflation to come back down to around 2% next year."

"There is still a great deal of uncertainty about the inflation outlook and we will be watching the data closely in the coming months."

"The pace of growth appears to be slowing somewhat relative to the first half."

"We still have a long way to go to get back to our maximum employment goal."

Market reaction

The US Dollar Index showed no immediate reaction to these remarks and was last seen clinging to modest daily gains at 92.65.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

GBP/USD advaces towards 1.3450 after BoE decision, US Q2 GDP

GBP/USD gains positive momentum on Thursday, approaching 1.3450 and trading at fresh multi-week highs. The Bank of England decided to maintain the benchmark rate unchanged at 3.75%. The MPC voted 6-3 to keep rates on hold, with the 3 dissenters favoring a rate hike. US Q2 GDP missing expectations helped the pair advance, while renewed US Dollar weakness across the FX board pushes the pair further up ahead of the monthly close.

EUR/USD jumps above 1.1500, highest in six weeks

The EUR/USD pair trades north of 1.1500 in the American session on Thursday, reaching fresh six-week highs. The US Dollar is in sell-off mode, with multiple factors weighing on the American currency. Not only did the Federal Reserve vote divided to keep rates on hold on Wednesday, creating doubts about a September hike, but US Q2 GDP missed expectations. A suspected JPY intervention adds pressure on the Greenback.

Gold recovers the $4,100 level as US Dollar weakens further

Gold trades just above $4,100 amid a US Dollar sell-off. The Greenback enjoyed some near-term demand following Wednesday's post-FOMC downfall, but was unable to retain its gains. The preliminary estimate of the US Q2 GDP showed the economy grew at an annual rate of 1.5%, missing the market's expectations of 2.1%.

Ripple Price Forecast: XRP builds recovery momentum as whales increase exposure

Ripple (XRP) rises toward the pivotal $1.10 resistance on Thursday, marking three consecutive days of gains. This neutral-to-slightly bullish outlook follows the Federal Reserve (Fed) decision to leave interest rates unchanged in the 3.50%-3.75% range.

The FOMC: Rates left on hold; dollar falls as Warsh fails to vote for hike

The Fed kept interest rates on hold today, defying a 30% chance in the Fed Funds Futures market that rates would rise. The Committee voted 9-3 to keep rates on hold, with governors Kashkari, Hammack and Logan all voting to hike rates due to concerns about inflation. The immediate market reaction has been a sharp drop in the USD on a broad basis.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.