New York Fed president speaking on the economic outlook posted by Midsize Banking Coalition of America.
- The economy has not improved enough to pare stimulus
- Inflation likely to rise to 3% this year before falling close to 2% in 2022 and 2023
- Expected GDP to be close to 7%
- Sees inflation is temporary effects due to reopening of the economy
- Confident we will see continued progress toward employment on the reopening
- The medium-term outlook is very good
- Supply bottlenecks and shortages of driving up inflation
- There's a great deal of uncertainty about the inflation outlook and I will be watching the data closely
- Demand for labor is a strong
- There is a lot of churn in the hiring process now
- it is taking longer for the supply-side of the global economy to respond to surge in demand
Other comments from his speech and Q&A
- We are seeing bottlenecks recede over time
- Fed is committed to having low inflation in the United States
- A lot of factors holding interest rates lower globally are likely to continue after the pandemic
- inflation bump is mostly temporary and caused by reopenings but will keep an eye on the data
- low interest rates are not a problem right now
- Fed has the tools to not only increase balance sheet when it's needed but also to get it back down to appropriate level when the Fed doesn't need to support the economy the same.
- There may be more persistent changes in the labor supply including some retirements
- he does not doubt that the economy is going to get to full strength, but process could be choppy
- More parents will be able to rejoin the labor market as more schools reopen
- The number of people being hired is high, but there are also a lot of people changing jobs
- There may be more persistent changes in labor supply including some retirements
Earlier today Feds Kaplan and Bullard both said that the time for central bank to rethink its strong support for the economy is getting closer if it hasn't already arrived.
Bullard said that the tapering decision one happened super quickly.
Most of the comments come from the Wall Street Journal. Williams is a voting member on the FOMC as the New York Fed president and vice chair of the Fed. Both Kaplan and Bullard are not voting members in 2021.
