- Modestly restrictive monetary policy gives space to examine new data.
- US economy in good place, job market is still solid.
- Uncertainty, tariffs and reduced immigration will slow economy.
- US economy likely to grow around 1% this year.
- Expects unemployment rate to rise to around 4.5% by years end.
- Tariffs will boost inflation to 3% this year.
- Expects inflation to gradually put the client to 2% over the next two years.
- Overall inflation close to 2%, but underlying inflation still elevated.
- See signs tariffs impacting inflation in some sectors.
- Flax week soft data versus more resilient hard data.
- Fed balance sheet drawdown continues to be smooth.
Fed Williams comments are more in line with Fed Powell’s. Sees high inflation accelerating due to tariffs with end of year inflation approaching 3%.
This article was written by Greg Michalowski at www.forexlive.com.