Fed's Williams: Thinks economy is in a very, very good place

New York Federal Reserve's John Williams is crossing the wires and has said he thinks the economy is a very very good place.

Key comments

  • LIBOR transition is the biggest challenge facing financials. 
  •  NY Sed's Williams says thinks the economy is in a 'very, very good place'.
  • Williams says that over time the fed's balance sheet will have to grow modestly.
  • Williams says expects inflation to pick back up close to 2 percent this year.
  • Williams says risks to the outlook include global growth, china and coronavirus, low inflation.

FX implications 

There is not enough meat on the bone for there to be a market reaction. Most economists have already forecasted that the Fed will now pause in 2020 after having cut rates three times in 2019. The Federal Reserve said in its last meeting that interest rates would remain between the target range of 1.5% and 1.75%. Fed chair Jerome Powell said developments in the global economy since the last Fed meeting — namely threats posed by the coronavirus outbreak — have not changed the central bank's wait-and-see approach.  "It’s very uncertain ... how far [the coronavirus] will spread and what the macroeconomic effects will be," Powell told reporters at the press conference last month.

The US dollar is the cleanest of all dirty shirts in the laundry basket as US data continues to support a growth outlook for the US economy, robust yields and prices. The DXY rallied onto the 99 handle this week and is holding firm. 


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