N.Y. Fed President John Williams Offers Economic Outlook
(From left: John Williams and Laura Escobar, by Anneliese Mahoney)
NEW YORK–John Williams, President and CEO of the Federal Reserve Bank of New York, offered an optimistic but measured view of the U.S. economy during a session at the Mortgage Bankers Association’s Secondary and Capital Markets Conference.
In a conversation with 2025 Mortgage Bankers Association Chair Laura Escobar, President of Lennar Mortgage, Williams started off by pointing to strong labor market data, underlying growth in the economy and easing inflation.
“You look at the data from the past, the economy is in a really good place. But we’re kind of at a point where some of the forward-looking indicators definitely are signaling some concerns,” he said, pointing to business surveys and measures of optimism. He noted it’s important to keep an eye on such metrics and continue to gather information.
“We kept interest rates where they are because they think they’re already where they need to be–slightly restrictive or modestly restrictive policy–meaning keeping the economy growing kind of close to potential, bringing inflation back to 2%,” Williams said. “So, monetary policy is well-positioned, but again, looking ahead–a lot of uncertainty, a lot of things can shift.”
As for the outlook for foreign investors, Williams said a lot of global investors continue to view the U.S. as a great place to invest, including in treasuries, MBS and other fixed-income assets. He pointed to the strength of the tech and AI industries as particularly attractive.
“A lot is happening. And so markets, or market participants here and around the world are trying to digest that, just like we all are trying to figure out, ‘well, what does that mean for interest rates? What’s it mean for the economy? And so you definitely see more volatility in these markets,” he stated. “But we have also seen–and this is the important part–is these core fixed-income markets, the U.S. Treasury markets, the MBS market and along with the money markets, have been functioning very well throughout this.”
Looking at the health of U.S. consumers, Williams said they’ve proven themselves to be resilient. While delinquencies have risen in recent months, they’re also somewhat normalizing from the unusual circumstances of the pandemic. However, consumers also remain nervous about the state of the economy and future challenges.
“My view is the economy is likely to slow this year relative to growth last year, but not anything worse than that,” he said.
