Fed’s Williams: Fed policy positioned well to get inflation back to 2%

• Recently there’s been a dearth of progress on lowering inflation
• Inflation still too high but should moderate in H2
• Expects inflation at 2.5% this year and ‘closer’ to 2% next year
• Wage gains still too high relative to 2% inflation goal
• Economy moving into better balance
• Fed will watch all data to make decisions on policy
• Inflation expectations have been stable

This is more of the ‘higher for longer’ rhetoric. The market is pricing in a roughly 50/50 chance of a Sept high with just 34 bps priced in for the year.

This article was written by Adam Button at www.forexlive.com.