Fed’s Williams: Longer-run inflation expectations are in line with the central bank’s 2% goal

New York Federal Reserve (Fed) President John Williams said on Friday, longer-run inflation expectations are in line with the central bank’s 2% goal.

Additional takeaways

If inflation expectations get anchored at too low a level that will then bring down actual inflation over time.

There is a great deal of uncertainty about the economy today.

The US housing prices are rising very rapidly and asset valuations are quite elevated.

House prices were driven higher by low-rate environment and pandemic factors.

Higher home prices are not a risk to financial stability and banks are better capitalized than during the last crisis.

Fed needs to be focused on the security of new payment technologies.

It's important to think about the positives to digital currencies but also the risks to consumers, investors and financial stability.

Market reaction

The US dollar index is seeing a spurt of fresh selling, as the risk sentiment gets a lift on the positive China Evergrande’s news.

At the time of writing, the dollar index is down 0.04% on the day, trading at 93.73, having stalled its recovery at 93.80.