NY Fed’s Williams: GDP growth this year could be strongest in decades

FILE PHOTO: John Williams, Chief Executive Officer of the Federal Reserve Bank of New York, speaks at an event in New York, U.S., November 6, 2019. REUTERS/Carlo Allegri

(Reuters) – A combination of strong fiscal support and continued vaccine distributions could help lift the U.S. economy as it recovers from the coronavirus pandemic and lead to the strongest growth in decades, New York Federal Reserve Bank President John Williams said Thursday.

Williams’s upbeat outlook mirrored optimism shared by several Fed officials this week who expect economic growth to rebound strongly. Like other policymakers, he made it clear the Fed is not planning to pare back its support in the near future.

“With strong federal fiscal support and continued progress on vaccination, GDP growth this year could be the strongest we’ve seen in decades,” Williams said in remarks prepared for a virtual event organized by One Hundred Black Men of New York, a nonprofit organization that provides scholarship, mentoring and educational support for the African American community.

Fed Chair Jerome Powell, testifying before Congress on Tuesday, said the U.S. economy could grow in the range of 6% this year, in line with some private forecasts.

Still, Williams said more work need to be done. New strains of the virus could slow the recovery and he expects inflation pressures to “remain subdued for some time.”

The policymaker also pointed out that the economic crisis caused by the virus has affected Black workers and business owners more severely than other groups and said closing those gaps is important to the recovery.

Williams said the Fed will “remain committed to using our full range of tools to help assure that the recovery will be as robust as possible.”

Asked about rising prices for crypto currencies, Williams said they are being treated more as an “asset class” to invest in than as a way to handle payments.

“We’re not seeing a lot of actual transactions and payments yet,” Williams said, adding the Fed is concerned about digital currencies being used for money laundering or terrorist financing. “We want to make sure it’s safe.”

Reporting by Jonnelle Marte; Editing by Chizu Nomiyama and David Gregorio

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2021-02-25 23:41:47

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