- New York Fed president Williams: My view is that spike in inflation mostly reflects temporary effects of surprisingly rapid opening of the economy
Market news
12 July 2021
New York Fed president Williams: My view is that spike in inflation mostly reflects temporary effects of surprisingly rapid opening of the economy
- Thanks to widespread vaccinations and robust support from fiscal policy, economy is reopening more quickly and more strongly than expected
- After sharp declines in employment, production, and prices last year, the opposite is now occurring. As a result, we are seeing a record number of job openings, supply bottlenecks in sectors such as autos, and sharp increases in prices for some high-in-demand goods and services
- I expect inflation-adjusted, or real, GDP to increase 7% this year; if that forecast comes true, that would be the fastest y-o-y growth rate since 1984
- I cannot stress enough that we still have long way to go to get back to full strength; there are still over seven million fewer jobs today than before the pandemic
- Recent inflation data have moved up sharply, which has garnered a great deal of attention; my view is that spike in inflation mostly reflects temporary effects of surprisingly rapid opening of the economy
- I expect that as price reversals and short-run imbalances from the economy reopening play out, inflation will come down from around 3% this year to close to 2% next year and in 2023. It goes without saying that there is a great deal of uncertainty about the inflation outlook, and I will be watching the data closely
- It’s clear that the economy is improving at rapid rate, and the medium-term outlook is very good. But the data and conditions have not progressed enough for FOMC to shift its monetary policy stance of strong support for economic recovery
Market Focus
Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimerOpen Demo Account & Personal Page