Fed Williams comments US inflation and monetary policy

1:58 PM 18 June 2024

John Williams, the chair of Federal Reserve Bank of New York commented today US economy, signalling that further rate cuth path will depend on data.

  • I expect inflation to keep coming down this year. 
  • 3% inflation is not the new norm, the Fed will get inflation to 2%.
  • We still have a very strong labour market with some hiring slowing
  • Recent inflation data has been encouraging.
  • Interest rates will come down over the next few years
  • Inflation is coming back to the Fed's 2% target.
  • Politics will not influence Fed rate decisions.
  • I expect interest rates to come down gradually as inflation eases.
  • Things are moving in the right direction for monetary policy.
  • The US economy is doing well and is in a better balance.

US Redbook on YoY measure came in 5.9% vs 5.5% previously, signalling higher sales (year-over-year same-store sales growth) across the largest US merchandise stores. During current economic conditions, it may be a signal that Americans prefer lower prices and large retailers such as Walmart or Costco which may be not very good signal about the economy, despite higher than previously rise on yearly basis.

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EURUSD (H1)

As we can see, the EURUSD rebound from SMA50 support zone after weaker than expected US retail sales data and crossed above 23.6 retracement of the downward wave, since US CPI reading at 7 June.

Source: xStation5

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