By Tony Mace
NEW YORK (MaceNews) – Federal Reserve policy-makers are not yet ready to decide their next policy move, and their thinking hinges on domestic data and global economic conditions, New York Fed President John Williams said Wednesday.
“We still have a lot of work to do – there’s more data, including the employment data” to consider ahead of the next FOMC policy meeting, Williams said in response to a question after a speech at a Euromoney conference, adding, “We don’t have a decision made.”
Asked about prospects for domestic consumer spending, Williams said the consumer was carrying “much of the weight for growth going forward,” and that he anticipated slower spending in response to weakness in manufacturing and elsewhere. “I don’t see it continuing to be as robust as it has been in the last few years but it still should be in line with trend,” he said, adding that it was important to note that consumption is a lagging indicator.
In his formal remarks, Dudley said the economy is “in a good place, but not without risk and uncertainty” and that “persistently low inflation is a key area of my attention.”
“Ongoing disinflationary pressures from abroad, and the risk that inflation expectations in the U.S. may have drifted down after many years of inflation running below 2 percent, form an important part of this picture,” he said.
“If we look beyond the headline GDP figure, which remains good, there are more mixed signals coming from different sectors. Robust consumer spending is balanced by signs of slowing business investment. We’ve also seen a decline in exports and weakening manufacturing data, reflecting slowing global growth and uncertainty related to trade and geopolitical risks.
“I am carefully monitoring this nuanced picture and remain vigilant to act as appropriate to support continuing growth, a strong labor market, and a sustained return to 2 percent inflation.
Asked after his speech about an op-ed piece by former New York Fed President William Dudley that argued against Fed easing to offset the impact of US trade policy, Williams said the Fed is obliged to take the policy actions of elected officials as a given, and the central bank would continue to make policy in an apolitical, independent fashion.