New York Fed President John Williams said yesterday, “Inflation is far too high, and persistently high inflation undermines the ability of our economy to perform at its full potential… There is still more work to do.”
“I do think we’re going to need to keep restrictive policy in place for some time; I would expect that to continue through at least next year,” he added.
Nevertheless, “at some point, nominal interest rates will need to come down. Otherwise real interest rates will be going up and that would just be tightening policy further and further in terms of its effects on the economy… I do see a point, probably in 2024, that we’ll start bringing down nominal interest rates because inflation is coming down and we would want to have real interest rates appropriately positioned.”
