by Nicholas Jasinski
Barron’s
inflation goals argues for a continued, gradual decline in interest rates, said Federal Reserve Bank of New York President John Williams on Monday.
The U.S. economy is strong today and inflation is above the Fed’s 2% annual target, with monetary policy that remains restrictive, Williams said in remarks before the Queens Chamber of Commerce in New York on Monday. So why should the Fed cut at all?
“The simple answer is that while growth in demand has been strong, growth in supply has been even stronger,” Williams said in prepared remarks. “Specifically, robust growth in both the labor force and in productivity has meant that the economy can expand at a higher pace than we saw before the pandemic, without creating inflationary pressures.”