New York Fed President: 'Prices have not yet settled down.'

November 21, 2024 17:42 JST
This year's inflation rate is expected to be 2.25%, with a growth rate of 2.5% anticipated for next year.
Mr. Williams made the statement in an interview with Barron's paper
Despite the strong economic conditions, NY Fed President Williams stated that while the inflation rate has decreased, it is still below the Federal Reserve's target of 2%.
"Inflation has dropped significantly towards the 2% target. However, we have not yet reached the target," Williams said in an interview with Barron's published on the 21st.

The President also stated, "I believe that moving the Federal Funds (FF) rate closer to a more normal or neutral level will be appropriate in the future."
Williams once again indicated his expectation that the inflation rate based on the Personal Consumption Expenditures Price Index will decrease to 2.25% for the full year this year. He expects the US growth rate to be 2.5% next year and anticipates that the labor market will "cool off a bit more."

Williams stated that the cooling of the labor market and the decline in inflation rates indicate that the current monetary policy is restraining the economy. He indicated an expectation that interest rates will further decrease by the end of next year. Additionally, he mentioned that the employment environment is softening, but signs of an economic downturn are not visible.
Williams cited lower productivity, geopolitical issues that could disrupt the global economy, and the difficulty for China to maintain its growth momentum as the biggest risks ahead.
He pointed out that China's difficulties could cast a shadow on global demand and potentially impact inflation worldwide.