New York Fed President John Williams Believes Monetary Policy Stance Can Move To More Neutral Setting

Federal Reserve Bank of New York President John C. Williams said on Thursday it will be appropriate to continue the process of moving the stance of monetary policy to a more neutral setting over time.

According to the text of Williams' speech at the Binghamton University in New York, the Fed official said that with progress being made toward achieving price stability, “moving toward a more neutral monetary policy stance will help maintain the strength of the economy and labor market.”

Williams reportedly spoke after the release of the consumer inflation data on Thursday. The Bureau of Labor Statistics reported that the consumer price index rose 0.2% on a seasonally adjusted basis, reflecting the same increase as in August and July but coming in higher than the expected 0.1%. In the 12 months through September, CPI increased 2.4% versus an expected 2.3% rise.

Following the release of the inflation data, major U.S. indices were trading in the red. The SPDR S&P 500 ETF Trust (SPY) was trading lower by nearly 0.15% while the Invesco QQQ Trust, Series 1 (QQQ) lost nearly 0.06% by afternoon.

Retail sentiment on Stocktwits, however, trended in the ‘bullish’ territory for both the ETFs.

Williams also noted that with monetary policy moving to a more neutral setting over time, real GDP is expected to grow between 2.25% and 2.5% this year and to average about 2.25% over the next two years.

“I anticipate the unemployment rate to edge up from its current level of about 4% to around 4.25% at the end of this year and stay around that level next year,” he said.

Also See: United Airlines Stock Rises On Largest International Expansion Yet, But Retail Remains Bearish

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