Incoming New York Fed President John Williams suggests that it is about time to end forward guidance.

Becky Berkman

2018-05-13 08:33:00 Sun ET

Incoming New York Fed President John Williams suggests that it is about time to end forward guidance in order to stop holding the financial market's hand. As the current president and chief research director of San Francisco Federal Reserve Bank, Williams expects U.S. inflation to rise to the central bank's 2% target in mid-2018. This inflation expectation resonates with the key consensus that most FOMC members share in the recent central bank forum. The inflation rate can stay above the 2% target for another couple of years even as the Federal Reserve continues the current interest rate hike toward late-2019. Also, Williams shares and echoes Fed Chair Jerome Powell's recent open statement that the Federal Reserve should complete the current course of forward guidance.

In fact, economic media commentators and stock market investors should focus on economic data such as real GDP economic growth, employment, wage growth, capital investment, and industrial production etc. It is thus futile for financial market observers to read into the FOMC minutes, narratives, and word choices etc for key clues about the U.S. macro economy. The FOMC minutes and linguistic analytics can be informative to some extent, whereas, only economic data drive monetary policy decisions.

 


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The Economist delves into the modern perils of tech titans such as Apple, Amazon, Facebook, and Google.

Jacob Miramar

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Former Fed Chair Alan Greenspan discerns asset bubbles in the American stock and bond markets in early-2018.

Jonah Whanau

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Foxconn invests $10 billion in a new manufacturing plant for LCD display panels in Wisconsin.

Chanel Holden

2017-07-13 08:35:00 Thursday ET

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President Trump now agrees to cease fire in the trade conflict with the European Union.

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Federal Reserve's QE exit strategy makes sense ahead of Fed Chair Janet Yellen's stepdown in 2018.

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Jared Diamond delves into how some societies fail, succeed, and revive in global human history.

Becky Berkman

2023-08-28 08:26:00 Monday ET

Jared Diamond delves into how some societies fail, succeed, and revive in global human history.

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