Federal Reserve member Williams made significant statements emphasizing the importance of economic data in shaping future monetary policy. These comments come amid a recent decline in Bitcoin's value.
Importance of Economic Data
Williams noted that economic data plays a crucial role in monetary policy decisions. Support for President Trump has become relevant as Fed Chair Powell becomes more inclined towards rate cuts. However, despite favorable employment data, Bitcoin's price has fallen, largely due to concerns related to Cook's dismissal.
Forecast Indicators for 2026-2027
Williams, who advocates for interest rate cuts and aims for the Fed chairmanship, predicts a slow economic growth. "I expect the economy to grow by 1.25%-1.50% this year and the unemployment rate to be around 4.5% next year. I forecast PCE inflation at 3.00%-3.25% this year and 2.5% in 2026," he shared. According to his forecast, inflation is expected to return to the Fed's target of 2% by 2027.
Prospects for Interest Rate Cuts
FedWatch data indicates that the Fed has a long road ahead for a 100bp+ rate cut. Key highlights from Williams' remarks include the observation that tariffs are not leading to long-term inflation increases, and the labor market is gradually cooling.
Williams' comments reflect the complex situation in the economy and indicate that key monetary policy decisions will depend on economic indicators in the future.
