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16/05/24
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Fed Won’t Cut Despite Lower CPI – Williams
Although the recent consumer inflation data has been generally well received by financial markets, according to John Williams, the Federal Reserve Bank of New York’s President, the news was not enough for the central bank to trim interest rates soon.
On Wednesday, data showed that U.S. consumer price growth had in April slowed as expected to 3.4% on an annualized basis, while core CPI, which excludes volatile food and energy prices, increased by 3.6% y/y, the smallest annual gain since Apr. 2021.
In an interview with Reuters, Williams said the softer inflation tone was positive after a few months of disappointing data and the overall trend was fairly good.
He is however not yet confident enough that price pressures were moving to the Fed’s 2% inflation target sustainably.
Williams said monetary policy was restrictive and he didn’t see any indication that there was a reason to change the stance of monetary policy now.
Williams added that he didn’t see a need to tighten monetary policy now. This generally ended speculation that the Fed may have to hike rates more to push inflation down to desired levels.
Williams is a well-respected voice at the central bank and is the rate-setting Federal Open Market Committee’s vice-chairman.
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