It’s bizarre that Trump is completely politicizing the Fed over the pace of rate cuts. I don’t think there is anyone at the Fed who is significantly more dovish than Williams and they all see the same destination, it’s just a difference of a six month timeline in getting there, which shouldn’t even be a game breaker in a moderately weak economy.
- Fed must balance inflation and job risks right now
- Mon pol is modestly restrictive, appropriate in current economy
- Trade and immigration factors slowing activity, GDP will grow 1.25-1.5% this year
- Expects jobles rate to rise to about 4.5% next year
- Sees PEC inflation at between 3-3.25% this year, 2.5% in 2026
- Expects target inflation in 2027
- Clear signs that tariffs are impacting prices and buying power
- Tariffs likely to add 1.00-1.50% inflation this year
- Labor market cooling to pre-pandemic trends
- Labor market currently in balance
This is a nice slate of forecasts, time will tell if he’s right.
