New York Fed President John Williams told CNBC today, “A recession is not my base case right now. I think the economy is strong. Clearly financial conditions have tightened and I’m expecting growth to slow this year quite a bit relative to what we had last year.”
“But that’s not a recession,” he noted. “It’s a slowdown that we need to see in the economy to really reduce the inflationary pressures that we have and bring inflation down.”
On interest rate, Williams said, “we’re far from where we need to be”. Rate can rise from current 1.50-1.75% to 3-3.5%. “My own baseline projection is we do need to get into somewhat restrictive territory next year given the high inflation, the need to bring inflation down and really to achieve our goals,” he said. “But that projection is about a year from now. Of course, we need to be data dependent.”
