Williams stresses projected rate hikes are not a commitment

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Although the Federal Reserve projects two rate hikes in 2019, Federal Reserve Bank of New York President John Williams stressed that those are based on expectations of economic conditions and are not a commitment.

Williams, speaking on CNBC TV Friday morning, said the Fed is “listening carefully to the markets” and uses consumer surveys and other data collection in making its policy decisions. Currently, “the economy is strong going into 2019,” he said.

Further rate hikes will be based on data, he noted, and the outlook could change if the economy doesn’t progress as expected. “As Chair Powell said, we’re at the bottom end of neutral,” based on the Fed’s “best estimates.”

While balance sheet reduction is not set in stone, Williams said, in his opinion “it doesn’t need to be reconsidered at this point.”

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Monetary policy John Williams Federal Reserve Federal Reserve Bank of New York