Fed's Williams (voter) says Fed independence delivers better economic outcomes, and not time to worry about Fed independence with staff focused on the mission, adds context matters for inflation given persistence above target
Says:
- Tariffs have mostly worked their way through the economy, and the labour market is not adding to inflation pressures.
- Not surprised to see near-term inflation expectations rise.
- Seeing pretty stable longer-term inflation expectations.
- There are emerging issues with supply chain pressures.
- We are not seeing signs of problems with inflation expectations.
- We should see stabilization, decline in goods prices.
- A lot of uncertainty around energy price outlook.
- Job market is not "hot" but also not slowing dramatically.
- Monetary policy is mildly restrictive and he doesn't see any reason to hike or cut rates right now, while he understands why markets are optimistic about the future of the economy.
Context
Fed's Williams' comments underscore that the central bank views its independence as vital for achieving better economic results, suggesting stability in monetary policy. His insights on inflation, especially the lack of immediate pressures from the labor market and tariffs, indicate a cautious but optimistic outlook, which may alleviate concerns about aggressive rate changes in the near term. This stance could support risk assets as it suggests a steady policy environment, potentially influencing the USD and fixed income markets favorably.
Trade the TapeGet this analysis live, the moment it breaksNewsquawk's real-time dashboard delivers market-moving headlines and instant context to your desk before the rest of the market reacts.
Open Dashboard#UNITED STATES#USD#JAPAN#UNITED KINGDOM#IMPORTANT#FOREX#FIXED INCOME#ASIAN SESSION#FEDERAL RESERVE#CENTRAL BANK#INFLATION#MONETARY POLICY#DXY