The Chairman of the New York Federal Reserve and an influential member of the FOMC, John Williams, said on Monday that inflation remains the number one issue as it is running high and persistently hovering there, Reuters reported. The Fed’s goal is to get the economy back on its feet, she continued, adding that it is a challenging task, but one that the Fed is committed to doing.
Williams added that the events in China and the war in Ukraine are the main drivers of recent market volatility, but he noted that the Fed is seeing no signs of dysfunction in the Treasury bond market. In effect, plans to reduce the size of the portfolio are having an impact on long-term interest rates, he added, noting that financial conditions have already tightened as in 1994.
However, “we need to get real interest rates back to zero again,” Williams added, before noting that he expects inflation to ease a bit next year.
On Tuesday, Fed Chairman Jerome Powell will speak in public.
Source: Fx Street
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