US San Francisco Fed head Williams a next speech of 22 September
- Federal funds rate is of the order of 2.5% of the «new normal», will be an essential tool in the future
- we were as close as we have ever been in my career re inflation and employment objectives
- expects inflation to reach the 2% target in the next 2 years
- the market is to understand what we are trying to do
- the word of the day is the normalization
- fully in charge of the standardization of the balance sheet
- American economy is in very strong shape
- could be another rate hike this year and three next year based on how the economy develops
- it will take about 4 years for the balance sheet to get back to a normal level
- we have a bit of leeway to reduce interest rates in response to negative economic developments if necessary
This is the key to these tours both in the UK and the EU, in my humble opinion. Create a bit of wiggle room to cut when the proverbial hits the fan in the future.
USD not doing much on the comments.
Williams — Happy that the markets understand what the Fed want