Williams, president of the New York branch of the Federal Reserve, does not believe that the Fed's aggressive interest rate hike is the main reason for the recent collapse of two US banks.

(Reuters)

[Financial Channel/Comprehensive Report] The outside world believes that the Federal Reserve’s aggressive interest rate hikes have triggered the recent banking crisis, but John Williams, president of the New York branch of the Federal Reserve Bank of the United States, disagrees with this view. Instead, he believes that it is the These banks themselves have some very specific specific problems.

Williams said at an event at New York University on Monday (10th) that he personally does not believe that the pace of interest rate hikes was behind the collapse of the two banks in March. These institutions themselves had some special problems.

Please read on...

Williams, who is also vice chairman of the policy-setting Federal Open Market Committee (FOMC) this year, noted that when stress occurs in the banking system, banks may tighten credit conditions, which could affect consumer spending and employment.

"But we don't know if that's what's happening now," Williams said. "We haven't seen clear evidence of tightening credit conditions yet, and we don't know how big the impact will be."

Investors now expect the Fed to raise interest rates by another quarter at its May 2-3 meeting, but to start cutting rates later this year.

In response, Williams played down the importance of market expectations for these policymakers.

Williams said he wasn't too worried about the market's predictions because there could have been different views on the direction of the economic outlook.

Ultimately, he said, "we need to make what we believe to be the right choices to accomplish our goals of price stability and full employment."

Grasp the pulse of the economy with one hand I subscribe to Free Finance Youtube channel

Already added friends, thank you

Welcome to 【Free Finance】

feel good

Already liked it, thank you.

related news