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John Williams says latest US CPI fits Fed inflation progress path
Williams said energy-price inflation risks have eased somewhat, while he rejected any change to the Fed’s 2% inflation target and did not signal a new path for interest rates.
Federal Reserve Bank of New York President John Williams said the latest US Consumer Price Index report is consistent with the inflation progress the Fed wants to see in the coming months, describing the CPI reading as a small piece of inflation moving back toward the Fed’s goal. FXStreet reports that he delivered the remarks during keynote remarks tied to a talk with the Partnership for New York City.
Williams said risks from energy-price inflation have eased somewhat and emphasized there is “absolutely not” any consideration of changing the Fed’s 2% inflation target, adding the central bank should not move its goalposts. He also maintained that the Fed does not currently have clear direction on where interest rates are heading or when they could change.
The Fed official supported stepping away from forward guidance, and he said he does not have a particular view on the future direction of monetary policy. FXStreet also notes that policymakers showed strong support for moving away from forward guidance.
Williams characterized the tone as moderately cautious, highlighting data dependence rather than policy pre-commitments as markets respond to shifts tied to the Middle East conflict. The outlet also said the FXS Fed Sentiment Index slipped by 0.38 points to 126.13.