Fed's Williams: Sharp rise in inflation is mostly temporary

In an interview with Bloomberg TV on Tuesday, New York Federal Reserve President John Williams said that he is looking for achieved progress in terms of employment and 2% inflation, as reported by Reuters.

Additional takeaways

"Fed is not following a mechanical formula in making monetary policy."

"Fed is looking at a full set of data and taking into account uncertainty about the economy."

"Expecting real GDP to grow by 7% this year."

"Feeling good about the progress on vaccinations."

"Seeing unemployment rate coming down to 4.5% by year-end."

"GDP growth could be 3% to 3.5% next year."

"Sharp rise in inflation is mostly temporary."

"Expecting inflation at about 3.5% this year but that it will come down next year."

"Right now, it's really about watching the data and seeing how quickly the economy can recover."

"Knowing when it will be time to slow the pace of asset purchases will be driven by data."

"Fed will communicate plans transparently and it will be done in an orderly way."

"My focus is on providing the appropriate amount of monetary support."

"One of the lessons of the taper experience from years ago is the importance of getting the right time and communicating transparently to the public."

"We still have a long way to go to get to maximum employment."

"My view is the monetary policy accommodation is supporting the economy in general not targeting the housing market."

Market reaction

These comments were largely ignored by market participants and the US Dollar Index was last seen gaining 0.2% on the day at 92.02.