On Friday, May 10, New York Fed President John Williams spoke at the 21st Annual Bronx Bankers Breakfast.
“[T]he U.S. economy is in a very good place.”
“I anticipate a step-down of economic growth, from the 3 percent growth recorded last year to a still-solid pace of about 2–1/4 percent in 2019.”
“The economy remains on a path of healthy growth, with a very strong labor market and without the emergence of inflationary pressures. The current setting of policy positions us well to keep it that way.”
In his speech, President Williams discussed the U.S. economic outlook, the global picture, and the implications for monetary policy. He said that the U.S. economy had overcome the “jitters in financial markets” of December last year. First-quarter GDP numbers were strong, and the unemployment rate now stands at 3.6 percent, “the lowest level in nearly 50 years.”
Discussing inflation, he noted that the “data have come in lower than expected, with core inflation over the past 12 months dipping to 1.6 percent.” But he took the opportunity to highlight that trimmed-mean inflation, which removes the most volatile price movements, had held steady at 2 percent, the Fed’s long-run goal.
Turning to the global picture, he said “we’re not entirely out of the woods” regarding downside risks. He pointed to “signs of weakness in Japan, South Korea, and some regions of Europe” and said he would remain vigilant about the international data.
Discussing the current policy stance, President Williams said: “Although my view that we are in the right place in terms of monetary policy has not changed of late, the reasons for it have.” He pointed to recent U.S. data, the rebound of growth in China, and the reversal in the tightening of financial markets as signs that indicate near-term risks to growth have “receded somewhat.”
This article was originally published by the New York Fed on Medium.
The views expressed in this article are those of the contributing authors and do not necessarily reflect the position of the New York Fed or the Federal Reserve System.