NY's Williams Emphasizes Rate Hike "Optionality", Data Dependency

NY Fed's Williams speaking on CNBC in the first post-Dec meeting communication by an FOMC participant - overall the message is very similar to that delivered by Powell and the Statement/Dot Plot on Wednesday.

• Says that the Fed is "very focused on inflation" which is "obviously too high right now".
• Says he doesn't see any benefit to speeding the taper further than currently scheduled, with the first rate hike decision to be dependent upon the incoming data. He emphasizes that this week's decision creates the "optionality" to "likely" raise rates in 2022.
• While timing for the hike will "depend on data", Williams said he feels the "baseline outlook is very good" and that raising rates would be "positive" in terms of reflecting economic strength.
• He said he is focused on real interest rates (adjusted for inflation expectations), and that the higher funds rate path in the dots reflected in part the expected path of inflation. While he sees progress in moving rates back toward "neutral", there remains a question of where "neutral" is.
• Overall not much we didn't hear already on the state of play from Powell (and markets didn't move), though useful to hear from a senior FOMC member who is typically on the dovish end of the spectrum. Later at 1300ET we hear from one of the more hawkish members of late, Gov Waller.