San Francisco Federal Reserve President John Williams said in his latest interview, that he sees small short-term gains and little for the longer term when asked about fiscal policies under US President Donald Trump.
He also stated that the economy is running “somewhat hot” with US unemployment at 4.4 percent, fiscal policy will not matter much to monetary policy. The best way to sustain the economy’s momentum, according to Williams, is to slow by the economy a bit by gradually raising rates.
As the inflation remains below FED’s 2 percent target, Williams among most FED’s officials, does not see a pressure to rise rates more than two times this year. The FED raised interest rates in March for only the third time since the Great Recession. Currently range of 0.75 percent to 1 percent is still giving a boost to the economy, according to FED Chair Janet Yellen.
Williams added, that going above 1.5 percent to 1.75 percent range would require a giant jump in productivity growth. “I don’t see that as at all likely.”
FED officials plan to start trimming their $4.5 trillion balance sheet later this year. More steps toward this plan we could see in the coming months.
EURUSD is trading in a range for a few days now with resistance at the range of 1.1245 and 1.1262 and support between 1.1176-1.1161. Currently on the rise but with a resistance in play. Source: xStatnion5