Fed's Williams (Voter, Neutral) says monetary policy well positioned amid a favourable outlook and that policy is now closer to neutral, well-positioned ahead of January rate decision; expect that we’ll see [the labor market] stabilize this year"

MONETARY POLICY

• “In considering the extent and timing of additional adjustments… the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”
• “Monetary policy is now well positioned to support the stabilization of the labor market and the return of inflation to the FOMC’s longer-run goal of 2 percent.”
• “The actions taken by the FOMC… have moved the modestly restrictive stance of monetary policy closer to neutral.”

INFLATION

• “Underlying inflation trends have been pretty favorable.”
• “Tariffs have been overwhelmingly borne by domestic businesses and consumers.”
• “I expect inflation will be just under 2-1/2 percent for this year as a whole, before reaching… 2 percent in 2027.”
• “I anticipate inflation will peak at around 2-3/4 to 3 percent sometime during the first half of this year.”
• “Inflation appears likely to peak sometime in the first half of this year as the full effects of tariffs are felt.”
• “Medium- and longer-term expectations remain well within their pre-Covid ranges.”
• “Inflation expectations remain well anchored.”

GROWTH

• “The economic outlook is favorable.”
• “I expect the economy to grow above trend this year, with real GDP growth between 2-1/2 and 2-3/4 percent.”
• “GDP growth looks to have been somewhat above 2 percent last year, and it will likely pick up some this year.”

LABOR MARKET

• “This has been a gradual process, without signs of a sharp rise in layoffs.”
• “Downside risks to employment have increased as the labor market cooled.”
• “The unemployment rate moved up… and ended the year at 4.4 percent.”
• “I expect that we’ll see [the labor market] stabilize this year and then strengthen somewhat thereafter.”

TARIFFS / TRADE POLICY

• “I expect tariffs will have a largely one-off effect on prices.”
• “My current estimate is that the increase in tariffs… has contributed around one half of a percentage point to the current inflation rate.”
• “The tariffs have already meaningfully increased U.S. prices of imported goods.”

BALANCE SHEET & LIQUIDITY

• “I fully expect that standing repo operations will continue to be actively used.”
• “Standing repo operations can act as a shock absorber.”
• “This… in no way reflects a shift in the stance of monetary policy.”
• “The FOMC decided… to initiate reserve management purchases to maintain an ample supply of reserves.”
• “The FOMC stopped reducing its holdings… at the start of December.”