Williams on CNBC
- We are listening to markets very carefully
- We are hearing market concerns about risk to the economy
- We're moving to a more data dependent mode
- Data dependent also means listening to markets and markets are signaling some risks to the outlook
- We will be ready to reassess and reevaluate our views
- Sees solid growth in 2019, unemployment near 50-year lows
- We are attuned to the possibility that outlook may change
- Powell's comments that path of balance sheet normalization is on autopilot is the base case
- Would not reconsider a balance sheet unwind at this point but would consider it if there was a material deterioration in the outlook
- FOMC statement wasn't a promise to raise rates again
- Plan to stay on path assumes the economy stays strong
- Expects to continue trimming balance sheet assuming economy remains on the expected path
- Expects inflation to be around 2% next year
- Two hikes make sense in the context of a strong economy
- Fed to adjust its views based on data and the outlook
- Not yet seeing direct effects of higher US tariffs but concerns remain
- Trump's criticism did not influence Fed's decision this week
- We are at the bottom end of the estimate of the neutral range
- Fed did change policy views at the meeting this week, including the longer-term path for rates
Williams said that the word change to 'judges' in the FOMC statement indicates that the Fed is more open to changes in the outlook.
Risk trades are cheering on Williams and USD/JPY is back to unchanged on the day. The S&P 500 is up 22 points to the best levels of the day.
These comments are a contrast from Williams on Dec 4. From then and this.
