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Williams Sees Modestly Higher Rate Path Than Sept Forecast

FED
  • Ahead of the Dec 13-14 FOMC meeting with revised economic forecasts, NY Fed’s Williams tells reporters after his speech that he sees a modestly higher rate path for policy compared to his September dot.
  • “Stronger demand in the economy than I previously thought and then somewhat higher underlying inflation suggest a modestly higher path for policy relative to September, but not a massive change”.
  • Recall from the FOMC minutes that “various” participants expected the terminal rate to be “somewhat higher than they had previously expected”.
  • The comments help consolidate FOMC-dated OIS hovering around a terminal at 5.01% for May/Jun’23 meetings, up ~2bps from first thing this morning.

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