NY Fed Pres Williams: Economy hasn't improved enough to pare policy stimulus


New York Fed Pres Williams, who is speaking at a banking conference, has stated that inflation is likely to rise to 3% this year before falling to near 2% in 2022.

Williams sees US GDP expanding by 7% in 2021 YoY. 

He said that the economy hasn't improved enough to pare policy stimulus. 

US dollar impact

There has been little reaction in forex to the comments as the US dollar has already given back some ground, but the DXY has held above where it traded before the Fed’s statement on Wednesday.

His comments are accompanied today by those of St. Louis Fed President James Bullard who has cited the "upside risk" of potential inflation and said that the central bank will have to stay "nimble" as the US economy reopens after the COVID pandemic.

He also said that he doesn't see how rates can get substantially higher than they are in the EU or Japan

He said that the Fed's eventual taper strategy would have to involve constant monitoring of incoming data, rather than going on "automatic pilot."

Policymakers including Boston Fed chief Eric Rosengren are among the numerous other officials speaking this week who may provide more clarity after St. Louis’s James Bullard said last week interest rates may need to rise in 2022.

 

 

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