New York Federal Reserve Chairman John Williams said on Monday that the US central bank still has a lot of work to do to bring down very high levels of inflation, and also stressed that he expects a notable rise in unemployment as a result of this. monetary policy trajectory.
“Inflation is very high, and persistently high inflation undermines our economy’s ability to function at its full potential,” Williams said. She said there were signs of progress in slowing the price jump and added that further Fed action would be needed to bring inflation back to the central bank’s target.
“Further monetary policy tightening should help restore the balance between supply and demand and return inflation to 2% in the coming years,” Williams said in a keynote address at a meeting of the New York Economic Club.
“A tighter monetary policy has started to reduce demand and inflationary pressures,” he said, adding that “it will take time, but I am fully confident that we will return to a sustained period of price stability.”
Williams is also a vice chairman of the Federal Open Market Committee (FOMC), responsible for setting the key interest rate, with the central bank’s next monetary policy meeting scheduled for December 13-14.
The Fed is expected to hike the key short-term rate again, currently in the range of 3.75% to 4%, as policymakers look to bring inflation back to the highest levels seen in four decades.
Williams hasn’t shown a preference for the size of the Fed’s next move, nor has he hinted at how much he thinks the central bank will need to raise borrowing costs over time.
Williams said in his remarks that unemployment is likely to rise even as the US economy is likely to escape recession.
The job market remains very tight, Williams said, with strong hiring and rapid wage gains. With growth expected in slightly positive territory this year and next, he said the unemployment rate is expected to rise to between 4.5% and 5% by the end of next year.
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Source: Terra
Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.
