Fed: The job of reining in too-high inflation isn’t over — John Williams

The President of the Federal Reserve Bank of New York, John Williams, He made statements with an aggressive line tone. He said on Tuesday that inflation is still too high and that central bank measures to reduce price pressure will inevitably hurt the economy.

Reuters reported the following:

Over the past year, the Fed “has taken strong steps to reduce inflation,” Williams said in a prepared speech to a group of bankers in New York. But “although we’ve seen some moderation in recent months, the inflation rate is still too high at 5%,” and core inflation rates are also too high, she said.

“We must rebalance the economy and bring inflation down to 2% on a sustained basis,” Williams said. “Our work is not finished yet,” she said, adding: “We will stay the course until we have finished our work.”

”Williams did not offer any firm guidance on the Fed’s rate actions, but said the path the central bank should take “is likely to involve a period of subdued growth and some softening in labor market conditions. “

”Williams said in his remarks that he believes core price pressures, as measured by the Personal Consumption Staples Price Index, could fall to 3% this year and 2% in coming years.”

Williams also said growth is likely to be a tepid 1% this year. The current unemployment rate of 3.4% will probably increase to between 4% and 4.5%. He added that the job market is currently “extremely tight” and wage increases are steep.

dollar update

The Dollar Index traded around 103.00 on Tuesday but rose as US inflation came in higher than expected, dampening hopes that the Federal Reserve would end its tightening campaign soon.

The US annual inflation rate, as measured by the Consumer Price Index, slowed only slightly to 6.4% in January from 6.5% in December, below market forecasts of 6-2%, which suggests that controlling inflation will take longer than expected.