Fed Waller, Williams and Goolsbee comment on US economy 🏛️EURUSD drops 0.3%

The U.S. dollar continues to strengthen today, with the EURUSD pair down nearly 0.3%. On March 21, several Federal Reserve (Fed) members — Christopher Waller, John Williams, and Austan Goolsbee — shared their views on the U.S. economy, inflation, tariffs, and monetary policy. Here is the complete breakdown of their comments.

Christopher Waller (Fed)

• In my opinion, the slower pace of balance sheet runoff set to begin in June 2024 remains the right decision.
• Even with a slower pace of asset reductions, a clear plan of action is still necessary. At this week’s meeting, I preferred to maintain the current pace of balance sheet reduction.
• Slowing or halting asset runoff will be appropriate once we get closer to a sufficient level of reserves.

John Williams (Fed)

• I closely monitor fiscal policy and its impact on both the economy and monetary policy.
• More transparent communication is a powerful and effective tool.
• The 2% inflation target is not up for discussion during the policy review process.
• The neutral interest rate is a helpful reference but should not guide monthly decisions.
• Assessing the impact of tariffs largely depends on the specific details.
• It’s crucial to consider the long-term effects of changes in government policy.
• I am monitoring and collecting data on how government policy changes affect the economy.
• The Fed must remain very focused on data right now.
• Monetary policy is well positioned to achieve the Fed’s goals.
• Economic data is sending mixed signals.
• The economy started the year on solid footing.
• The labor market entered the year better balanced.
• Data suggests the public believes near-term inflation pressures will ease.
• Slowing the pace of balance sheet reduction was a natural step for the central bank.
• The disinflation process has been uneven.
• Many different economic scenarios are possible right now.
• Current interest rate levels are appropriate.
• There is currently a high level of uncertainty in the economy and in policymaking.
• Today’s moderately restrictive monetary policy is fully justified.
• I expect economic growth to slow in part due to lower immigration.

Austan Goolsbee (Fed)

• The evidence on how sentiment affects economic activity is mixed, but contacts from the Midwest report that confidence is influencing their decisions.
• Uncertainty could impact corporate investment plans and weaken the economy.
• An economic slowdown may justify rate cuts, but if inflation rises beyond the impact of tariffs or exceeds expectations, the Fed would have to revise its outlook.
• Current hard data does not reflect 1970s-style stagflation, but it is concerning when both inflation and unemployment are rising.
• Tariffs raise prices and reduce output — a stagflationary impulse.
• Responding to stagflation depends on how it affects inflation and the labor market.
• There is no universal response to stagflation — much depends on expectations.
• There is nothing more uncomfortable than a stagflationary environment.
• If long-term inflation expectations begin to rise, the Fed will have to act.
• The Fed’s commitment to maintaining 2% inflation is rock solid.
• Beyond tariffs, the Fed must also consider upcoming tax cuts and other factors.
• The longer the Fed waits, the greater the risk that rate cuts will need to come later and more aggressively.
• During periods of uncertainty, it’s important to gather as much data as possible.
• I still believe the economy is resilient, and if inflation continues to fall, interest rates will be lower in 12–18 months.
• We must be cautious with the term “transitory” — in this case, it depends on whether tariffs apply to intermediate goods, trigger retaliation, and how they pass through to consumers.
• The larger and more supply-shock-like the tariffs are, the harder they’ll be for the Fed to look through.
• Imports make up only 11% of GDP, so one-time tariffs that don’t provoke retaliation are more likely to be transitory.
• Before deciding how to respond to tariffs, the Fed needs to understand their duration, potential for retaliation, and impact on prices.
• Unemployment and inflation reflect progress toward the Fed’s dual mandate.
• Macroeconomic data continues to show strength in the economy.
• Markets want information quickly, but that’s not realistic right now.
• Current conditions may be a shock to the economy, depending on how long they persist.
• Businesses are anxious and holding back capital expenditures due to tariff uncertainty.
• Among business contacts, there is a clear shift toward caution and delaying investment spending.
• In times of high uncertainty, we must wait for more clarity before making significant moves.