New York Fed president, John Williams, speaks in Zurich
- Lower neutral rates would require new policy approaches
- As this would mean slower global recovery and inflation running below target
- Rate-cut space in the event of future downturns will be limited
- Says that investors view low inflation globally as a 'new normal'
It doesn't look like Williams is on board with more rate hikes but then again, commenting that the Fed only has limited ammunition to deal with future downturns can be interpreted to mean the opposite view.
Nonetheless, I reckon Williams is sitting in the broader camp whereby he's not expecting future rate hikes for now and certainly not pursuing lower rates unless inflation and the economy pins the Fed into a corner over the next few months.
