Fed’s Williams thinks crude will be low for years to come. Moreover, he believes inflation can make a roaring comeback to 2%. Most importantly, he believes the Fed should tune out all of the noise, while watch ‘the dats’, and continue its path towards rate normalization.
According to the Federal Reserves ‘dot plot’, this means a total of 16 fresh rates hikes over the next 3 years.
“I still think we should be following the same strategy, however many increases or the pace of increases, which will be driven by the data,” San Francisco Fed President John Williams told reporters in New York.
“We get caught up too much in should we raise in March or June or not or either… It just makes sense the strategy of gradually raising interest rates,” he added.
“I don’t see anything on the domestic economy that worries me in terms of GDP or employment data that we’ve seen. But the inflation data has been a struggle” given persistently low oil prices, though he added he is not too concerned about falling market-based inflation expectations.
All of this jawboning about whether or not to raise interest rates is fantastically boring to Fed’s Williams. He has more important things to do than to worry about pesky stock markets and global trade disruptions due to forex gyrations.
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lolz. i’m front loading kuroda and the March talk squad
How many Fed Devil Dogs are there? This is getting ridiculous. Get the to a doctor to prescribe meds for them, to cure their hallucination of inflation– inflation which does not exist in the real world. Hallucinating people often think they can not be bothered with the real world. That doesn’t mean they are not sick.
Bring on the interest rate hikes, ready for you. We’ll pick up the pieces later.
“Japan has championed both Friedman and Keynes. They have built bridges to nowhere and dropped Yen notes from helicopters for twenty years and still they have nothing to show for it. Clearly the additional return from Yen debt in Japan is close to zero and it exposes the nightmare of interventionists everywhere: it may just be that there are no policy remedies for a debt deflation.” – Hugh Hendry (before he went gaga)
I wouldn’t draw a ton of conclusions by generalizing from Japan to other nations. Every country has its particular ways of doing their economy, some of which help it and some of which hurt it. And particular economic ideologies often get those 2 backwards. It’s very popular on the Internets to put down Keynes, in spite of the fact that Keynesian economic policies have worked well a great deal of the time e.g. to bring the U.S. out of the Great Depression.