New York Federal Reserve John Williams said that demand is strong and that the supply side of the economy must catch up.
Williams said it is expecting strong Gross Domestic Product growth this year and says that the overall picture is very positive.
Fed’s Williams said that the current view is that the Fed are not near the ‘substantial further progress’ marker.
Williams said now is not the time to take action on bond purchases and that the Fed has the ability to adjust administered rates and other parts of the program so they work well.
Market implications
These comments come in contrast to that of earlier rhetoric from Dallas Fed’s CEO Robert Kaplan who has repeated today, ”it’s my view it would be better to ease off the QE accelerator gradually sooner rather than having to hit the brakes later.”
Meanwhile, the US dollar was already on solid footing ahead of the economic reports today and tomorrow, as traders bet that data will come out better than market forecasts.
Earlier, in a potential prelude to Friday’s Nonfarm Payrolls data, the US private payrolls increased by 978,000 jobs in May, the ADP National Employment Report showed.
This was the biggest increase since June 2020 and way higher than what economists polled by Reuters had forecast in an increase by only 650,000 jobs.
Additionally, risk sentiment deteriorated as investors turned cautious, supporting the greenback at the same time that the People’s Bank of China has essentially intervened to weaken the onshore yuan.
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