WASHINGTON (MaceNews) – New York Federal Reserve President John Williams said Tuesday that monetary policy is now “appropriate” for the economy but that he is more focused on downside risks to the outlook.
Williams, speaking to reporters after a speech here, said the current policy stance is “appropriate” in light of moderate trend growth, a strong labor market, and progress toward the 2% inflation target.
Williams was asked what factors would prompt the Fed to adjust its policy. “We have to make sure we aren’t overreacting to individual data points and we’re thinking about where the economy is over the next year or two,” he said. Given the dual mandate, policy-makers will ask “are there global factors or other things that are causing the US economy to slow below trend growth on a sustained basis?”
“With inflation still below our target, with …. some downgrades in the global outlook, I am definitely watching more now for some of the downside risks to the outlook now,” Williams said. “Of course, we are always going to be paying attention to the potential for upside risks too.”