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New York Federal Reserve President John Williams
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A key top Fed official said Wednesday he is more optimistic about the longer-run U.S. economic outlook than he was only two months ago,
In a talk sponsored by the Society for Advancing Business Editing and Writing, New York Fed President John Williams was asked about a prediction he made in September that it would take the economy three years to regain its strength.
“I would say that my view…if anything, has become somewhat more upbeat,” Williams answered.
One positive development he noted was that the economic rebound has been stronger than expected after virtually shutting down in March and April.
In addition, Americans seem to have gotten a lot better at managing “the narrow path” of grappling with COVID-19 while keeping the economy moving ahead, he said.
The news about potential vaccines is a third factor, the New York Fed president added.
Fed officials have forecast that interest rates won’t move off of zero through 2023. Williams said the Fed won’t change its monetary policy stance based on any forecast. The Fed’s new policy strategy, adopted in September, pledges to react to “what is actually happening in the economy,” he said.
To help the economy in the short term, Williams echoed Fed Chairman Jerome Powell’s call for Congress to pass another coronavirus stimulus package.
Without Congressional action, “the economy will be more challenged,” Williams said.
Asked what the Fed do If Congress fails to act, Williams said the Fed has committed to “use all of our available tools to support a strong economy.”
“We have the ability especially with monetary policy to make sure that interest rates are low and understood to be continued to be low throughout the recovery,” he said.
“A key part of this is…basically keeping financial conditions as supportive of a strong economy as possible,” he added.
Stocks turned negative in afternoon trading. The Dow Jones Industrial Average DJIA, -0.07% was down 26 points
