Fed's Williams: We still have work to do on rates

New York Federal Reserve President John Williams said on Wednesday that the labor market is still very strong and added that they have more work to do on rates, as reported by Reuters.

"The Fed will watch the data to determine the path of rate rises," Williams added and argued that inflation could prove more persistent. "Maybe services prices stay elevated, and if that happens we'll need higher rates."

Market reaction

The US Dollar Index showed no immediate reaction to these remarks and was last seen posting small daily losses at 103.25.

Additional takeaways

"Last year we had a long way to go on rates and that needed big steps."

"We are likely now closer to peak and can take smaller steps."

"25 bps rate hikes seem the best option for now, they allow us to more easily assess rates."

"A peak rate of 5%-5.25% is still a reasonable view."

"Fed policy is barely restrictive right now."

"Financial conditions have gotten tighter."

"Financial conditions seem broadly consistent with the Fed's outlook on policy."

"If financial conditions loosen too much, we would have to go higher on rates."

"We need to take long-term view of data, not get caught up in the day to day."

"Seeing more positive signs globally about growth."

"Some signs US economy is also showing more resilience."

"Signs suggest we still have some work to do to get economy back into balance."

"Lags in our actions also take time; we take that into consideration."

"Demand in our economy is much stronger right now than in normal times."

"Job market is extraordinarily tight right now."

"Future Fed rate cuts more about adjusting to lower inflation."

"Fed will need to maintain restrictive rates for a few years."