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NY's Williams Echoes Powell, Acknowledges Rates Could Peak Above 5.1%

FED
The only noteworthy comment by NY Fed Pres Williams in his Bloomberg TV appearance today is his acknowledgement that rates could go higher than the 5.1% currently depicted in the 2023 Dot Plot median, dependent on how the economy evolves - after all, the FOMC has had to upgrade their peak forecasts multiple times before.
  • Though as with pretty much everything Williams said today, Powell basically said it Wednesday, when he also acknowledged downside risks at the press conference ("I can't tell you confidently that we won't move up our estimate of the peak rate, again, at the next SEP. I don't know what we'll do. It will depend on future data. What we're writing down today is our best estimate of what we think that peak rate will be based on what we know. Obviously, if data - - if the inflation data come in worse, that could move up. And it could move down if inflation data are softer.")
  • Williams perhaps didn't push back against the inter-meeting loosening of financial conditions as forcefully as Powell, saying "some market participants are clearly more optimistic about inflation coming down".
  • Otherwise Williams echoed Powell on still-high inflation in core services areas which are related to labor market imbalances; doesn't see the new SEP as depicting a recession; thinks the Fed is well on their way to getting rates to sufficiently restrictive territory.
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