(Finance) – “I think we will need to keep the restrictive policy in place for some time; I expect it to continue until at least next year.” she supported him John Williamspresident of the Federal Reserve Bank of New York, in a speech at the Economic Club of New York.
Williams added that there is “still a lot of work to doas the FED continues its campaign to hike rates to tame price inflation. “Further monetary policy tightening should help restore the balance between supply and demand and return inflation to 2% in the coming years.” Williams added.
“At some point, nominal interest rates will have to come down. Otherwise real interest rates will go up and that would just mean more and more policy tightening in terms of the effects on the economy,” he explained. a point, probably in 2024, where we start to reduce interest rates nominal because inflation is coming down and we would like to have real interest rates positioned appropriately”.
While Williams pointed to some signs of progress in reducing inflation, he said interest rates need to rise further. ‘Inflation is far too high and a’persistently high inflation impairs our economy’s ability to function to its fullest potential,” he said.
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