Two Important FED Officials Made Statements After the Critical Economic Data from the US!

Recently, important officials of the FED, Thomas Barkin and John Williams, shared their views on the US economy, inflation, and the effects of the new Trump administration's policies. While expressing optimism about economic fundamentals in their statements, they emphasize the need to clarify the government's steps.

Speaking about the broader economic outlook, Thomas Barkin noted that pricing behavior between companies is returning to pre-COVID-19 patterns. Encouragingly, the labor market appears to have stabilized and the December unemployment rate provided further positive momentum. Barkin continued, "There is not much evidence to support the claim that the economy is weakening. Demand is strong but not explosive."

Barkin pointed out that the Fed is tending to return to the 2% target in terms of inflation, providing assurance that price pressures have eased. He said, "We can see possible ways for inflation to remain stable or continue to move towards our target."

Barkin also mentioned interest rates and stated that current long-term interest rates are consistent with levels seen in the early 2000s, which were characterized by minimal restrictions on commercial activities. He confirmed that there have been no recent changes in long-term interest rates that would require adjustments in Fed policy.

Both Barkin and Williams expressed concerns about the lack of detailed policy direction from elected President Donald Trump's administration. Barkin acknowledges that the general direction, such as customs duties, is starting to become clearer, but specific details remain difficult to understand.

Williams reiterated this idea, stating that the uncertainty about government policies has limited some commercial developments. "The FED is currently in a wait-and-see mode to observe what elected officials are doing about policy," he said.

Williams shared additional views on basic economic factors:

• Inflation: It noted that some of the decline in inflation was due to factors outside the US and that the trend showed a broad base.
• Housing Market: Continued strong housing demand contributes to overall economic stability.
• Neutral Interest Rate: Williams argued that high public debt could affect the neutral interest rate, but claimed that it is not a significant factor in monetary policy decisions at this time.