Vice Chairman of the Fed and President of the NY Fed

It is still over an hour away, but as a reminder the Fed Vice Chair, Pres. of the NY Fed and voting member John Williams will be speaking at 2:15 PM ET/1815 GMT.

Back on July 11th Williams said:

  • current picture is complex but economy is in a good place
  • headline US economic data masking more nuanced economic picture
  • he expects US GDP growth around 2.25% this year, above long run sustainable growth rate
  • inflation is below Feds goal, could feed into inflation expectations
  • monetary policy alone cannot address all the economic issues in the US
  • signs other than consumer spending point to slowing growth
  • business fixed investment has softened, manufacturing production is in decline
  • outlook for growth outside the US has dimmed
  • job growth has slowed this year, employment picture is mixed
  • US economy appears to be growing at a more moderate pace after surging ahead last year
  • uncertainties around the trade, global growth have not improved (dovish)
  • he does not see uncertainties shifting in a positive direction (dovish)
  • market expectations of rate cuts are showing up in easier financial conditions (dovish)
  • data suggest that labor markets are not as tight as they used to believe (dovish)
  • he has lowered his view of the natural employment rates (fit to dovish)
  • issues facing Fed include uncertainties around the US economy, growth going forward, inflation below goal (dovish)
  • he is watching inflation carefully, including possibility of inflation expectations falling (neutral with dovish slant)
  • he sees US interest rates as neutral (neutral)
  • not seeing upward pressure on wages, inflation (dovish)

There was a lot of dovishness in the comments. We will see if the more recent data over the last week, will have an impact on his views (inflation a little higher, Retail sales better, housing weaker, Philly Fed and empire manufacturing better, claims showing strong growth).

Also of note is tomorrow is the last day Fed members can speak before the quiet period ahead of the July 31 Fed decision. There is a near 100% chance of a cut, but it will be the "what comes after that" which will be most important to the market.

Right now the market is still pricing in a 33% chance for 50 bps in July.