John Williams, Speech: Achieving Balance Amid Uncertainty
Q&A Segment
Monetary Policy and the economy were not mentioned.
Speech Segment
Inflation Expectations
“One aspect of inflation that’s important for achieving and sustaining price stability is the anchoring of inflation expectations. Various measures of longer-run inflation expectations have remained well anchored at levels consistent with our 2 percent goal.”
“Inflation expectations for the next few years, which increased as inflation was rising, have come down in recent months. The New York Fed’s monthly Survey of Consumer Expectations showed that three-year-ahead inflation expectations are back to where they were in early 2021, and one-year-ahead expectations have decreased sharply.”
Fed Funds
“With all this in mind, last week, the FOMC raised the target range for the federal funds rate to 4-3/4 to 5 percent, its ninth consecutive increase. The FOMC said it “will closely monitor incoming information and assess the implications for monetary policy.” It also said it “anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”
“I will be particularly focused on assessing the evolution of credit conditions and their effects on the outlook for growth, employment, and inflation.”
Inflation
“While the FOMC has taken decisive steps to bring inflation down, lags exist between policy actions and their effects. It will take time for all of our inflation gears to move at a pace that takes us to our 2 percent target. I expect inflation to decline to around 3-1/4 percent this year, before moving closer to our longer-run goal in the next two years.”
GDP
“I expect real GDP to grow modestly this year and for growth to pick up somewhat next year. Slower growth and tighter monetary policy will likely lead to some softening in the labor market. So, I anticipate unemployment gradually rising to about 4-1/2 percent over the next year.”