An interesting speech from Federal Reserve Member John Williams, of the San Francisco branch, overnight. Here’s the Cliff Notes from ForexLive:
- Repeats expects 3-5 rate hikes this year
- Says exact number of rate hikes this year doesn’t matter
- If Federal Reserve raises rates more slowly this year, rate hikes could come faster in 2017
- Sees u.s. economy growing at 2 pct to 2.25 pct this year
- Sees unemployment at 4.5 pct by year end
- Sees core inflation at 1.5 pct at end of 2016
- Says level of concern on asset prices relatively low
- Rapid rise in commercial real estate prices definitely bears watching
Now there’s a bull on the US economy! But as we move into normalcy in the post-GFC world, is this lack of concern about asset prices and confusion over robustness in the global cycle pushing the Fed too far with its tightening?