Key Takeaways from President Williams’s Speech on Monetary Policy and the Economic Outlook

Felicity Barber, Executive Speech Writer

On Friday, January 18, New York Fed President John Williams described the current economic outlook and gave his views on monetary policy to a meeting of the New Jersey Bankers Association. In his remarks, President Williams emphasized that his views on monetary policy are data dependent.

He noted:

“from the perspective of the Fed’s dual mandate as a whole, things are looking very good.”

“it’s likely we’ll see GDP growth somewhere between 2 and 2½ percent this year”

In the current economic environment, “The motto of “data dependence” is more relevant than ever.”

During the discussion in New Jersey, President Williams remarked that while 2019 GDP growth is likely to be a step down from last year, it’s “still consistent with a healthy, growing economy.” But he noted that “if conditions turn out to be less robust,” he would adjust his policy views accordingly. He said: “I assure you that I have my eyes wide open and my ear to the ground when it comes to thinking about how the economic outlook will unfold in the year ahead, and as ever I’ll be guided by the data in all its forms.”

Discussing the balance sheet, he said: “Data dependence applies to all that we do.” He stressed that “if circumstances change, I will reassess our choices regarding monetary policy, including the path of balance sheet normalization. And, as always, if the outlook deteriorates in a material way, we stand prepared to deploy all our policy tools as appropriate in support of the economy.”

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