MNI POLICY: Fed's Williams Warns of Worsening Unemployment

--"Some Time" Before Fed Has Clearer View Of Economy

--Repeats Recent Forward Guidance

By Evan Ryser

     WASHINGTON (MNI) - New York Fed President John Williams Thursday pledged

unwavering commitment to limit the economic damage from Covid-19, warning of

worsening unemployment and stating it will be some time before a clearer view on

the economy develops. 

     Covid-19 has had "profound consequences for the U.S. and global economies"

and "our economic future will be determined in large part by the path of the

virus," Williams said in prepared remarks. 

     "It's going to be some time before we have a clearer view of the effects on

other industries, including autos, higher education, manufacturing, and

professional services," said Williams, a voting member of the FOMC. 

     The latest unemployment rate of 14.7% does not reveal the full extent of

the financial devastation faced by millions of American families, Williams said.

For example, the data don't capture those who had to leave their jobs, either

for their own health or to take care of loved ones.

     The Fed slashed interest rates to just above zero in two unscheduled

meetings in March, announced numerous emergency facilities and announced

unlimited bond buying. 

     The New York Fed leader pledged "unwavering commitment to limit the

economic damage" from Covid-19, and repeated recent forward guidance. The FOMC,

he said, expects to keep interest rates at near-zero until confident that the

economy has weathered recent events and is on track to achieve  maximum

employment and price stability goals.

     Williams also touted the role of fiscal policy. "It can do what monetary

policy cannot: provide for the public health response and transfer income to

those most affected by the outbreak. Fiscal policy is also a vital partner in

the delivery of our own programs, supplying the financial support necessary for

the extraordinary scale of the credit facilities we're operating."

--MNI Washington Bureau; +1 202 371 2121; email: evan.ryser@marketnews.com

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