NY Fed's Williams projects potential growth at about 2%
NY Fed's Williams projects potential growth at about 2%, in line with many forecasts for this year, in his brief comments on The 'New Normal' for Growth at the Community Bankers Conference. He reiterated monetary policy is in the "right place" currently, and the outlook remains positive, with growth on track. While the slowing from the 3% seen last year has caused some angst, Williams reminded it comes with a "backdrop of historically low unemployment, and low, sable inflation." He noted the various factors that boosted economic activity, including strong global growth, fiscal stimulus, and accommodative financial conditions, but said those have now calmed and indeed, reversed in come cases. But it's the underlying factors of demographics and productivity that cause him to see a 2% potential growth rate, rather than the "heady day's of the 1990s when growth rates were at 4%." These are fundamentally different times," he stressed. Williams is a perma-voter who supports the patient stance.