Key takeaways from President Williams’ New York Times interview

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Key takeaways from President Williams’ New York Times interview

On Monday, August 7, New York Times published a transcript of an interview with New York Fed President John Williams. In it, he discusses inflation, the labor market, and his outlook for monetary policy.

He said:

“At the moment I expect that we will have to maintain a restrictive stance [of monetary policy] for a while … but that will be determined by the underlying fundamentals that drive supply and demand in the economy, [and] inflation.”

“If inflation is falling, it will be natural to cut nominal interest rates next year, in line with this, to keep the monetary policy stance appropriate for an economy that is growing and to move inflation to the 2 percent level.” “

In the interview, President Williams said he expects headline consumer price index inflation to end the year at 3 percent before returning to 2 percent over the next two years as supply and demand balance out.

He noted that the US economy remains strong and that “many of the indicators are moving in the right direction.” He also said that while the unemployment rate remains historically low, he expects it to rise above 4 percent next year as inflation eases.

Read the full transcript.

Brian Manning is a corporate communications specialist in the Communications and Outreach Group at the New York Federal Reserve.

The views expressed in this article are those of the contributing authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System.

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