Federal Reserve Williams: Rates of return are not affected by inflation prospects and current interest rates are appropriate

ON 2 SEPTEMBER, THE FEDERAL RESERVE, WILLIAM WILLIAMS, STATED THAT BOND YIELDS WERE IMPORTANT INFORMATION FOR THE FEDERAL RESERVE'S ASSESSMENT OF THE ECONOMIC SITUATION, AND THAT THE RECENT INCREASE IN RATES OF RETURN HAD BEEN DRIVEN BY STRONG ECONOMIC PERFORMANCE, OPTIMISTIC ECONOMIC PROSPECTS AND STRONG INVESTMENT DEMAND, AND HAD SOME BEARING ON THE MIDDLE EAST CONFLICT, BUT AT PRESENT THE RATE OF RETURN DID NOT APPEAR TO HAVE BEEN SIGNIFICANTLY AFFECTED BY INFLATION PROSPECTS. WILLIAMS STRESSED THAT THE FED WOULD TAKE ALL ECONOMIC DATA INTO ACCOUNT IN A COMPREHENSIVE MANNER, AND THAT THE ULTIMATE RESPONSIBILITY REMAINED TO ACHIEVE PRICE STABILITY, WITH A 2 PER CENT INFLATION RATE AT THE TOP OF THE LIST; TARIFFS AND THE MIDDLE EAST WAR, WHICH WERE THE MAIN FACTORS BEHIND THE CURRENT HIGHER-THAN-TARGET INFLATION, HAD NOT YET BEEN SEEN TO HAVE A SECONDARY INFLATIONARY EFFECT, INFLATION EXPECTATIONS WERE STILL UNDER CONTROL, RECENT INFLATION DATA WERE ENCOURAGING AND OVERALL DECLINING, ALTHOUGH INFLATION IN SERVICES REMAINED SIGNIFICANTLY HIGH. HE STATED THAT THE LABOUR MARKET WAS STABLE AND STILL ROBUST, THAT IT NEEDED TO DRIVE INFLATION BACK TO 2 PER CENT IN THE FORESEEABLE FUTURE, THAT HE HOPED TO FURTHER OBSERVE AND ANALYSE ECONOMIC DATA BEFORE TAKING THE NEXT POLICY DECISION, AND THAT HE WOULD CONTINUE TO COLLECT INFORMATION FOR THE NEXT FOMC MEETING. WILLIAMS ARGUED IN SUPPORT OF THE JULY FOMC DECISION THAT INTEREST RATES WERE AT A GOOD LEVEL AND THAT MONETARY POLICY WAS WELL UNDER WAY。