Federal Reserve Chair Jerome Powell and Fed official John Williams are still undecided on when to end their balance sheet reduction initiative. Williams stressed the need for the Fed to focus on its objectives, not market views, and recognized the tightening of overall financial conditions. He expressed uncertainty about the economy and inflation, and stated that the Fed must be ready to hike rates again if necessary. He also emphasized the need for the Fed to return to more normal policy levels over time, and to be prepared for unexpected events. Williams noted the market's large reactions to all news and the abundance of reserves. Despite Powell's previous statements, Williams clarified that rate cuts are not currently being discussed.
Powell: Rate cuts are a subject of discussion Williams: No they're not https://t.co/YMQJ87Hh0r
FEDβS WILLIAMS: RESERVES REMAIN VERY ABUNDANT.
π΄ FED'S WILLIAMS: OVERALL FINANCIAL CONDITIONS HAVE TIGHTENED.
FEDβS WILLIAMS: THE FED NEEDS TO FOCUS ON OBJECTIVES, NOT MARKET VIEWS.
FEDβS WILLIAMS: THE FED MUST BE READY TO HIKE AGAIN IF NEEDED.
π΄ FED'S WILLIAMS: WE ARE NOT READY TO SAY WHEN THE BALANCE SHEET WIND DOWN STOPS.
π΄ FED'S WILLIAMS: RESERVES REMAIN VERY ABUNDANT.
FED'S WILLIAMS: FED RATE CUT VIEWS DEPEND ON INDIVIDUAL OFFICIALS' VIEWS
π΄ FED'S WILLIAMS: THE FED NEEDS TO FOCUS ON OBJECTIVES, NOT MARKET VIEWS.
π΄ FED'S WILLIAMS: THE MARKET REACTING MAYBE MORE STRONGLY THAN FORECASTS SHOW.
π΄ FED'S WILLIAMS: WE WILL NEED TO MOVE POLICY BACK TO MORE NORMAL LEVELS OVER TIME.
π΄ FED'S WILLIAMS: BIG MARKET MOVES ARE A PATTERN FOR LAST YEAR.
π΄ FED'S WILLIAMS: MARKET REACTIONS TO ALL NEWS HAS BEEN QUITE LARGE.
π΄ FED'S WILLIAMS: THE FED MUST BE READY TO HIKE AGAIN IF NEEDED.
Williams says they are not really talking about rate cuts right now - TX
π΄ FED'S WILLIAMS: WE MUST BE PREPARED FOR UNEXPECTED EVENTS.
π΄ FED'S WILLIAMS: WE ARE AT OR NEAR RIGHT PLACE FOR MONETARY POLICY.
π΄ FED'S WILLIAMS: MY BASE CASE FOR THE ECONOMY IS GOOD, INFLATION IS COMING DOWN.
π΄ FED'S WILLIAMS: I AM STILL HIGHLY UNCERTAIN FOR THE ECONOMY, AND INFLATION.
π΄ FED'S WILLIAMS: FED RATE CUT VIEWS DEPEND ON INDIVIDUAL OFFICIALS' VIEWS.
π΄ FED'S WILLIAMS: I AM NOT SPECULATING ON WHAT WILL HAPPEN ON RATES.
π΄ FED'S WILLIAMS: IS FOCUSED ON WHETHER RATE POLICY IS IN RIGHT PLACE.
πΊπΈ Fed's Powell not ready to say when balance sheet wind-down ends Federal Reserve Chair Jerome Powell said on Wednesday that central bank officials have yet to decide when they will end their balance sheet reduction effort even as they are now actively contemplating interestβ¦ https://t.co/KPk2h1FchW https://t.co/4d8mDOo17t