FED: NY's Williams Reiterates That Inflation Is Set To Recede, But AI A Risk
NY Fed's Williams made similar comments in a moderated discussion Thursday to those he's made in recent weeks about inflation being too high now but expected to recede in the coming quarters - headlines from the discussion (which wasn't publicly broadcast) are below. He's likely one of the 8 FOMC members who penciled in an end-2026 rate at the current level of 3.625% in his June Dot Plot, I.e. hold through year-end.
- In one of the few full quotes we've seen, Bloomberg noted that Williams emphasized that his main area of concern with regard to inflation is the upward pressure created by AI-related investment. “If this creates a sustained impulse to demand relative to supply in inflation, I do think that’s the kind of situation where you don’t look through this". And if such inflation proved persistent, “then monetary policy would need to respond to that" (i.e. hike). But “on the other hand, if it isn’t and things play out in a more benign way, I do think monetary policy is, and continues to be, well positioned."
- "*Fed's Williams: Inflation Is Far Too High" -DJ
- "*Fed's Williams: Despite Uncertainty in Oil Prices Energy Prices Are Around Their Peak and Will Come Down" -DJ
"*WILLIAMS: 0.2% MONTHLY PCE IN H2 WILL BE CONSISTENT WITH GOAL" -BBG - "*WILLIAMS: TARIFFS IMPACT ON INFLATION CLOSE TO ITS PEAK" -BBG
- "*Fed's Williams: If AI Creates Sustained Impulse to Demand, You Don't Look Through This" -DJ
- "*WILLIAMS: IN LONGER RUN AI COULD DELIVER POSITIVE SUPPLY SHOCK" -BBG
- "*Fed's Williams on Inflation: We Will Get Back to 2%, That's the Goal" -DJ
- "*Fed's Williams: Not Seeing Signs of Second Round Effects of Inflation" -DJ"
- "*Fed's Williams: Labor Market Has Held Up Well, Risks Are on Inflation Front" -DJ
- "*Fed's Williams: AI Boom Could Move Neutral Rate Up" -DJ
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CHINA-EU: G7 & EUCO Summits Mark Important Week For Direction Of Trade Relations
(MNI) London - Over the next week, there could be some notable ructions within Western-aligned international blocs regarding the future direction of trading relations with China.
- Politico reports that, ahead of the G7 leaders summit in Evian-les-Bains on 15-17 June, French President Emmanuel Macron is looking to bring China in on a call with the bloc on Thursday, 11 June to "address global trade imbalances". It is not confirmed at what level each country will/might be represented, but the report notes, "The call is a notable step for a group of Western democracies that has in recent years taken an increasingly confrontational stance toward China. But France [...] has taken a more conciliatory approach when it comes to dealing with China. French officials argue that underinvestment in the European Union and overconsumption in the U.S. as well as Chinese overproduction contributed to the current situation."
- While France may be looking to push a more conciliatory stance at the G7, SCMP reports that ahead of the European Council summit on 18-19 June there are "signs that big member states may be willing to take a tougher stance on trade despite huge pressure from Beijing." The report claims that while the Commission is making efforts to defuse tensions, there is little expectation in Brussels or member state capitals that China will be willing to make enough (or indeed any) concessions in order to facilitate an improved relationship, and that Beijing refuses to see EU policy as pro-Europe rather than anti-China.
PIPELINE: Corporate Bond Update: EIB, Kommuninvest Priced, Tencent on Tap
- Date $MM Issuer (Priced *, Launch #)
- 06/09 $4B *EIB 7Y SOFR+37
- 06/09 $1.5B *Kommuninvest 1.75Y SOFR+20
- 06/09 $1.2B Rocket Cos $600M each: 5NC2, 8NC3
- 06/09 $500M Allegiant Travel 5NC2
- 06/09 $Benchmark ICL Group 10Y +155
- 06/09 $Benchmark Tencent 10Y +50a, 20Y +60a
- 06/09 $Benchmark Jackson Life National 5Y +125a
- 06/09 $Benchmark Fortitude Global Funding 5Y +150a
- 06/09 $Benchmark Mercury General 10Y +200a
