NY Fed Williams: There are risks to both sides of fed’s employment and price stability goals and the outlook is still uncertain


New York Fed President John Williams said on Monday that the record demand for a Federal Reserve program that lets money market funds and other firms park cash with the Federal Reserve overnight is not concerning and the tool is working as intended to help set a floor on short-term rates.

Key notes

He would not describe market reaction to last week’s fed meeting as a taper tantrum.

There are risks to both sides of Fed’s employment and price stability goals and the outlook is still uncertain.

Fed chose not to have a formula for average inflation targeting.

Core principle of Fed’s approach is that inflation expectations should be anchored at 2%.

There are upside risks to inflation, which has come in stronger than people expected.

There is a good understanding of the fed’s framework and the understanding that some inflation overshoot is part of the goal.

Labor market is matching workers at a really good clip and wages are picking up.

There is a tight labor market in the short run because we’re in this extraordinary period of churn.

Most important thing is watching the data and seeing how things play out in terms of employment gains and inflation.

Expects the economy to continue to grow nicely in the next couple of years, unemployment to continue to come down and inflation to come out close to 2%.

Overnight reverse repo facility is working exactly as designed in terms of providing a floor to interest rates.

He is not concerned about high usage of overnight reverse repo facility or if it should continue to increase

Fedhas the tools to make sure that interest rates are within the target range.

Fed’s adjustments to administered rates were about keeping the fed funds rate within the target range because the downward pressure on short-term rates is growing.

Money market funds have come under distress in the past and should have the attention of regulators.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD hovers around 1.1900, retains weekly gains

The EUR/USD pair trades around the 1.19 mark after the Eurozone Q2 Prelim GDP beat estimates with 2% while US PCE inflation rose by less than anticipated in June, printing at 3.5% YoY. Risk-on mood persists.

EUR/USD News

GBP/USD retreats after flirting with 1.4000

GBP/USD retreated from near the 1.4000 level, but the greenback remains away from investors' radar. Optimism over the Brexit issue and the declining trend in new COVID-19 cases in the UK offers support to the pound.

GBP/USD News

XAU/USD slides to $1,820 area, downside seems limited

Gold traded with a mild negative bias around the $1,825 region, or daily lows, during the early North American session, albeit lacked any follow-through selling.

Gold News

Shiba gets listed on eToro as demand for SHIB skyrockets

Leading investment platform eToro has been adding cryptocurrency assets on popular demand from users. The Dogecoin killer recently amassed 600,000 holders despite range-bound price action. 

Read more

NIO shares rise again as Wall Street shrugs off recent China woes

NYSE:NIO added 1.86% as EV and China stocks bounced back again. Nio rides higher as industry leader Tesla gets some major upgrades. Nio rival XPeng releases a refreshed look for its compact SUV.

Read more

Forex MAJORS

Cryptocurrencies

Signatures