DXY - “Optimistic about the medium-term outlook for the economy"
Fed’s Williams says he expects inflation to remain subdued despite strong growth ahead
Even though the economic outlook is brightening, the inflation rate is likely to remain subdued, a top Federal Reserve official said Thursday.
New York Fed President John Williams told a group of Black leaders of New York that he’s become “more optimistic about the medium-term outlook for the economy.”
Williams said GDP growth could be “the strongest seen in decades.” Earlier this week, Fed Chairman Jerome Powell said 6% growth this year was not out of the question. That would be the fastest annual growth rate since 1984.
Many Wall Street investors think that faster growth means higher inflation. Yields on 10-year Treasurys have risen sharply.
Williams says he expects underlying inflation “to remain subdued for some time.”
Williams said inflation won’t move to levels consistent with the central bank’s 2% longer-run target only “over the next few years.” He did not discuss the sharp rise in bond yields in Thursday’s trading session.
Williams echoed Powell’s concern that strong growth was masking economic damage for millions of Americans. He noted that the labor market is still down nearly 10 million jobs from pre-pandemic levels.
He gave no sign the Fed would reverse its easy policy stance.
“Despite uncertainties, we are fully committed to supporting the economy through this period and reaching our maximum employment and price stability goals,” he said.
Earlier Thursday, some of Williams’ colleagues on the Fed said inflation could move higher this year.
The DXY rides this optimism, pushing bullish movements between yesterday and today.
Even though the economic outlook is brightening, the inflation rate is likely to remain subdued, a top Federal Reserve official said Thursday.
New York Fed President John Williams told a group of Black leaders of New York that he’s become “more optimistic about the medium-term outlook for the economy.”
Williams said GDP growth could be “the strongest seen in decades.” Earlier this week, Fed Chairman Jerome Powell said 6% growth this year was not out of the question. That would be the fastest annual growth rate since 1984.
Many Wall Street investors think that faster growth means higher inflation. Yields on 10-year Treasurys have risen sharply.
Williams says he expects underlying inflation “to remain subdued for some time.”
Williams said inflation won’t move to levels consistent with the central bank’s 2% longer-run target only “over the next few years.” He did not discuss the sharp rise in bond yields in Thursday’s trading session.
Williams echoed Powell’s concern that strong growth was masking economic damage for millions of Americans. He noted that the labor market is still down nearly 10 million jobs from pre-pandemic levels.
He gave no sign the Fed would reverse its easy policy stance.
“Despite uncertainties, we are fully committed to supporting the economy through this period and reaching our maximum employment and price stability goals,” he said.
Earlier Thursday, some of Williams’ colleagues on the Fed said inflation could move higher this year.
The DXY rides this optimism, pushing bullish movements between yesterday and today.