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Conditions have not progressed enough for the FOMC to shift its strong support for the economic recovery, New York Fed chief says.
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New York Fed President John Williams on Monday pledged continued commitment to strong monetary support for the economy because the job market remains far from its full potential while inflation pressures appear to be transitory.
"The economy is improving at a rapid rate, and the medium-term outlook is very good," he said in prepared remarks. "But the data and conditions have not progressed enough for the FOMC to shift its monetary policy stance of strong support for the economic recovery."
Williams held to his view that GDP will grow 7% this year, the fastest since 1984 while inflation will slow to 2% next year, citing temporary problems matching workers with jobs and suppliers hit by shortages including for automobile parts.
Strong growth in demand is translating into large numbers of people getting back to work, with more than half a million jobs added in May, which is "good progress," he said. He also said there are elevated numbers of people quitting their jobs.
"With the strong, sustained demand for workers and progress on hiring, I am confident that we will see continued strong job gains going forward," he said.
"But, I cannot stress enough that we still have a long way to go to get back to full strength," he said, citing employment that remains 7 million below pre-pandemic levels.
"Thanks to widespread vaccinations and robust support from fiscal policy, the economy is reopening more quickly and more strongly than expected. When it comes to the economy, it's getting better all the time," Williams told the Midsize Bank Coalition of America in a videoconference.