Fed's Williams will support rate hikes if monthly core inflation runs above 0.2% on average
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Last week, at a New York Fed Symposium, Fed's Williams offered some clear guidance on what would make him change idea on holding rates steady. Williams said that AI-fuelled demand was his primary inflation worry. He mentioned that the central bank can look through the transitory
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Lead — The desk interprets John Williams' recent remarks as a signal of cautious optimism regarding inflation, with longer-term expectations remaining stable despite near-term pressures. Per the full note [source], Williams emphasized that the labour market is not currently a source of inflationary pressure, which supports the Fed's current stance of watchful patience. This aligns with our consensus target of 1.075 for the USD/EUR pair, as traders await clearer signals from the Fed. The upcoming economic data releases may provide further clarity on inflation trends.
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