- Does not believe the economy is on the verge of a recession
- Slowdown in jobs and firms’ hesitancy to hire warrants attention
- My view is that tariffs have increased imported goods prices
- But don’t see any signs of second-round effects that could amplify effects of tariffs on inflation
- Underlying inflation seems to be moving gradually towards 2%
- We have a reasonably good picture of what’s happening, especially around the things that matter the most to us
- It is appropriate for rates to go back to neutral setting
- Political figures have their views on the Fed but it is really important for us to get our job done as best as we can
Williams’ argument relates more to the narrative that the labour market is softening while also brushing aside the potential stickiness of tariffs inflation. This is certainly an interesting one particularly after having seen what the FOMC minutes provided yesterday here. Williams tends to be taken in the same light as Powell, so the comments here certainly are standing out a fair bit. The dollar has lost some ground on the day as such.
This article was written by Justin Low at investinglive.com.