Fed's Williams and Bostic: "It Will Take Until June or July to Assess Economic Situation"

Korea Economic Daily

Summary

Fed Presidents Williams and Bostic stated that due to very high policy uncertainty, it will take until June or July to understand the US economic situation.
Fed President Bostic noted the possibility of one rate cut this year amid uncertainty from tariffs.
As concerns grow over the fluidity of the US economy, policy uncertainty, and changes in inflation expectations, the Fed's policy response is deemed important.

Williams: "US Economy is Fluid and Policy Uncertainty is Very High"

Bostic: "Possibility of One Rate Cut Due to Tariff Uncertainty"

New York Federal Reserve Bank President John Williams and Atlanta Federal Reserve Bank President Raphael Bostic stated that due to high policy uncertainty, it will take until June or July to better understand the US economic situation. They also mentioned that it might take three to six months to see if the economic situation stabilizes.

On the 19th (local time), John Williams said at a conference hosted by the Mortgage Bankers Association (MBA) that "it will take until June or July to collect data and understand what is happening here."

Atlanta Federal Reserve Bank President Raphael Bostic also pointed out in an interview with CNBC on the same day that "the US economy is fluid and policy uncertainty is very high." Bostic also mentioned that "it might take three to six months to see how the situation stabilizes."

Bostic further noted that due to increased uncertainty from tariffs this year, he currently sees the possibility of one rate cut. He particularly expressed concern about inflation and the public's future inflation expectations, explaining that "because inflation expectations are moving in an unstable direction."

Meanwhile, Williams said that uncertainty is causing difficulties not only for policymakers but also for businesses and households. He noted the difficulty in predicting how the Trump administration's tariffs and other policies will reshape the US economy.

Williams acknowledged that inflation is falling and the economy is nearing full employment, but he is monitoring delinquency rates and the growth of consumer spending.

According to the CME FedWatch Tool, rate traders expect two 0.25% point cuts by the end of this year. This is a decrease from the four cuts expected until the end of April.

Fed officials stated in early May that they held rates steady and noted increased uncertainty due to tariffs. They are also concerned about the risk of rising unemployment and inflation.

Guest Reporter Kim Jung-ah kja@hankyung.com