New York Fed President John Williams suggested that, should the economy evolve as anticipated, it would be prudent to “dial back the policy restraint gradually over time, starting this year.”
However, he was quick to stress the inherent uncertainty in the economic outlook, underscoring the need for Fed to maintain a data-dependent approach.
“The outlook ahead is uncertain, and we will need to remain data-dependent,” he said in a speech, adding “I will remain focused on the data, the economic outlook, and the risks as we evaluate the appropriate path for monetary policy to best achieve our goals.”
Williams also touched upon inflation, projecting a continued but gradual decline towards Fed’s 2% target. He cautioned, however, that this trajectory might not be smooth, referencing “bumps along the way” evidenced by some recent inflation data.
