John Williams, Speech: Attaining and Maintaining Price Stability

Banking Crisis

“Nonetheless, these developments (the banking crisis) will likely lead to some tightening in credit conditions for households and businesses, which in turn will weigh on spending. It is still too early to gauge the magnitude and duration of these effects, and I will be closely monitoring the evolution of credit conditions and their potential effects on the economy.”

Inflation Expectations

“Indeed, throughout this period of high inflation, one of the bright spots is that various measures of longer-run inflation expectations have remained remarkably well anchored and consistent with our 2 percent target.^”

Inflation

“Because of the lag between policy actions and their effects, it will take some time for the FOMC’s actions to bring inflation down to our 2 percent target. With inflation expectations well anchored, I expect inflation to decline to around 3-1/4 percent this year, before moving to our longer-run goal over the next two years.”

GDP

“Turning to GDP, the data flow for the first quarter indicates that the economy continues to expand at a solid pace. I expect real GDP to grow modestly this year as tighter monetary policy continues to take effect, with growth picking up somewhat next year.”

Jobs

“In addition, we are beginning to see some signs of cooling in the labor market. I expect slow growth will likely lead to some softening, with unemployment gradually rising to about 4 to 4-1/2 percent over the next year.”

Fed Funds

“Inflation is still too high, and we will use our monetary policy tools to restore price stability.”

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