Fed’s Williams, downplaying recession fears, says ‘outlook very favorable’
New York Fed President John Williams on Wednesday pushed back on market fears of a looming recession, saying that the baseline economic forecast remains “a positive one.”
“Right now, the outlook is actually very favorable,” Williams said during a talk at the University of California, San Diego. He said GDP growth is around 2% rate, with a “very strong” labor market and inflation near a 2% rate.
Williams noted economists have been notoriously unable to predict recessions.
“Economists are really good at saying we just had a recession. They are not so good at expecting a recession,” he said.
Where is the economy going from here? Williams said it was a “mixed picture.”
Global economic growth has slowed, trade disputes, and other geopolitical tensions have led to higher uncertainty and this seems to have contributed to a pullback of business investment, and trade between nations seems to be slowing down, he said.
“I think there are definitely a lot of uncertainties and risks out there that we need to be navigating,” Williams said.
The Fed is grappling with the how to model trade uncertainty, he said. https://www.marketwatch.com/story/feds-williams-downplaying-recession-fears-says-outlook-very-favorable-2019-10-02