NY Fed's Williams hints at flexibility with balance sheet unwind

New York Fed President John Williams hinted at the idea of flexibility in the Fed’s ongoing process of shrinking its balance sheet. In response to the first big Fed commentary since its Wednesday meeting, markets popped but quickly came back down.

“We did not make a decision to change the balance sheet normalization right now but as I said, we’re going to go into the new year with eyes wide open, willing to read the data, and re-assess the economic outlook and take the right policy decisions,” Williams told CNBC on Friday.

More broadly, Williams pledged that the Fed will remain data-dependent on its economic outlook, saying that policymakers are not “sitting there saying we know for sure what’s going to happen” in 2019. Even with the Fed revising down its projections on 2019 rate hikes from three to two, Williams said nothing is for certain.

"This is not a commitment, or a promise, or in any way a sense that we know for sure that’s what we are going to do," Williams said, adding that “things can change between now and next year.”

https://finance.yahoo.com/news/ny-feds-williams-hints-flexibility-163144041.html