Fed President Williams Sees Interest Rates Heading Higher

John Williams, the President of the New York Federal Reserve, gave his thoughts today about monetary policy. Similar to what Jerome Powell said yesterday, Williams believes inflation has not eased enough to pause interest rate hikes. Indeed, he sees rate hikes peaking at the 5% to 5.25% range, which equates to two additional 25 basis point increases.

In addition, Williams believes that monetary policy needs to remain restrictive for a few years in order to bring inflation down to the 2% target and keep it there. Markets didn’t appear to like his remarks.

Indeed, the ETFs that track the major indices saw prices dive in today’s session as the rally that was seen in January begins to stall. These ETFs include:

• SPDR S&P 500 ETF Trust (SPY)
• Invesco QQQ Trust (QQQ)
• SPDR Dow Jones Industrial Average ETF Trust (DIA)

Disclosure