A senior Federal Reserve official has countered rebukes that the US central bank will cause a painful recession as it attempts to tame sky-high inflation, instead forecasting the economy will show continued “strength and resilience” despite far tighter monetary policy.
In a speech delivered on Tuesday, John Williams, president of the New York Fed, acknowledged the central bank’s task to “turn down the heat” on a red-hot economy without undue hardship would be difficult, but said it was “not insurmountable”.
The message from Williams — a close confidant of Fed chair Jay Powell and a voting member of the Fed’s monetary policy setting committee — was delivered at a tumultuous time for financial markets, which have whipsawed violently in recent days as investors prepare for an end to the pandemic-era stimulus measures that central banks worldwide have had in place for the past two years.