FED: Williams Echoes No Hurry To Cut Rates

NY Fed’s Williams (permanent voter) prepared remarks (here) focused on central bank credibility - the bedrock of central banking is anchored inflation expectations - but subsequent Q&A and a separate Bloomberg TV have offered some more color that suggests a similar stance to Powell. That’s of some note with Williams one of the most dovish members of the FOMC although we also see Powell as dovish leaning compared to the broader committee. In particular, there appears no rush to cut rates. 

Event Q&A: 

• "*WILLIAMS: PUBLIC MUST HAVE CONFIDENCE INF. HEADED BACK TO 2%
• *WILLIAMS: WITHOUT PRICE STABILITY, NO ECO STABILITY
• *WILLIAMS: TRADE POLICY WILL ADD TO RISKS OF SLOWER GROWTH" - bbg

Bloomberg TV interview: 

• "*FED'S WILLIAMS SAYS CENTRAL BANK HAS TIME TO WAIT FOR DATA
• *WILLIAMS: LABOR MARKET HAS PROVED RESILIENT
• "*WILLIAMS: REAL NEUTRAL LEVEL AROUND .75% TO 1%" – bbg. Chimes with nominal being "around 3% or slightly below" from Apr 17 comments

From the BBG interview: One of the things we definitely see in the market pricing is the modal forecast is a relatively gradual decline in rates, reflecting the economy doing reasonably well. But market participants also are thinking about what happens if the economy weakens more and that would call for more cuts. Right now, we can be focused on what we’re doing today and really think through all the different scenarios so we’re ready as we get more data to know how to interpret it and eventually what we may need to do.  

The US consumer never lets us down. Consumer spending has been good, with actual spending holding up pretty well but hearing reports that paring back discretionary spending. We do think there was some loading up of imported goods ahead of tariffs. Businesses certainly did that. 

“*WILLIAMS: MONETARY POLICY IS MODESTLY RESTRICTIVE” – bbg. Same as both Powell and Kugler from those speaking in the last few days.