New York Fed President John Williams Expects Inflation to Return to 2% Target
Federal Reserve Bank of New York President John Williams expressed confidence in the current level of interest rates to bring inflation back to the central bank's 2% target. In remarks delivered at Pace University, Williams stated that the "modestly restrictive stance of policy" will support the return to 2% inflation while maintaining solid economic growth and labor market conditions.
Williams emphasized the uncertain economic outlook due to factors such as fiscal, trade, immigration, and regulatory policies. Despite these uncertainties, he expressed optimism about the economy's current state and anticipated further declines in inflation pressures.
Williams projected inflation to hover around 2.5% in 2020 and reach the 2% target "in coming years." He noted that inflation expectations, closely monitored by Fed officials, remain well-anchored.
Regarding labor market conditions, Williams projected the unemployment rate to remain within the range of 4% to 4.25% this year. He expressed satisfaction with the current balance in the labor market and observed that the cooling from previous tight conditions has largely stabilized.
Wage gains, according to Williams, align with productivity rates and the desired 2% inflation rate. He concluded that the current monetary policy stance is well-positioned to achieve both maximum employment and price stability.