Like a lunar rocket, inflation has shot up and come back down but has yet to land safely, New York Fed President John Williams said Wednesday.<\/p>\n
\u201cWhile we\u2019ve seen great progress toward achieving our goals, the journey is not yet over, and I am very focused on making sure we complete this mission successfully,\u201d Williams said in a speech at an aviation museum on Long Island.<\/p>\n
\u201cWe still have a ways to go on the journey to sustained 2% inflation,\u201d he added.<\/p>\n
Williams said the New York Fed\u2019s measure of core inflation, called the Multivariate Core Trend Inflation, is running at 2.3% annual rate in December, down from 5.5% in June 2022. <\/p>\n
Williams said there are likely to be \u201cbumps\u201d along the way. Still, he expects the Fed\u2019s favorite inflation measure, the personal consumption expenditure price index, will fall to a range of 2%-2.25% this year. That\u2019s a slight improvement from December when Williams forecast a 2.25% inflation rate this year. Williams said he sees PCE inflation at 2% in 2025.<\/p>\n
Williams said he expects U.S. GDP to slow to about 1.5% annual rate this year, down from a 2.5% rate in 2023. The unemployment may rise modestly to about 4%, he added. Williams said the current unemployment rate of 3.7% was near his estimate for how low the unemployment rate can be without putting upward pressure on inflation. <\/p>\n
\u201cIn summary, the economy is strong, imbalances and diminishing and inflation has come down but remains above our 2% longer-run target,\u201d Williams said. <\/p>\n
What does that mean for monetary policy?<\/p>\n
In a recent interview with Axios, Williams said he thought the Fed could start to cut interest rates later this year. <\/p>\n
Williams said there were risks that inflation might surprise on the upside. But at the same time, the economy might falter if consumers pull back unexpectedly.<\/p>\n
Stocks SPX<\/a>
\n DJIA<\/a><\/p>\n
\n were lower in early afternoon trading while the 10-year Treasury note yield
\n BX:TMUBMUSD10Y<\/a>
\n slipped to 4.89%.<\/p>\n<\/p><\/div>\n<\/div>\n