Wil­liams Says Pro­jected Hikes Aren’t a Com­mit­ment

The Bond Buyer - - Market News - — Gary E. Siegel

Al­though the Fed­eral Re­serve projects two rate hikes in 2019, Fed­eral Re­serve Bank of New York Pres­i­dent John Wil­liams stressed that those are based on ex­pec­ta­tions of eco­nomic con­di­tions and are not a com­mit­ment.

Wil­liams, speak­ing on CNBC TV Fri­day morn­ing, said the Fed is “lis­ten­ing care­fully to the mar­kets” and uses con­sumer sur­veys and other data col­lec­tion in mak­ing its pol­icy de­ci­sions. Cur­rently, “the econ­omy is strong go­ing into 2019,” he said.

Fur­ther rate hikes will be based on data, he noted, and the outlook could change if the econ­omy doesn’t progress as ex­pected. “As Chair Pow­ell said, we’re at the bot­tom end of neu­tral,” based on the Fed’s “best es­ti­mates.”

While bal­ance sheet re­duc­tion is not set in stone, Wil­liams said, in his opin­ion “it doesn’t need to be re­con­sid­ered at this point.”

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