Key Takeaways
- President Trump is slated to announce new deals aimed at lowering drug and pharmaceutical prices at a White House event today at 1 PM ET.
- Federal Reserve's John Williams indicated that the Fed is in a "good position to balance its goal" and that he does eventually see rates coming down, but has no sense of urgency to change monetary policy.
- Williams described current monetary policy as "mildly restrictive" and helpful with inflation above target, while noting that recent CPI data had some distortions and requires more information for a clear read.
- The Fed official expressed a "pretty good" feeling about the economic base case, projecting 1.5%-1.75% growth this year and an acceleration next year, with no signs of sharp deterioration in the jobs market.
President Trump is expected to unveil new initiatives today designed to reduce the cost of prescription drugs and pharmaceuticals. The White House confirmed the announcement, with Press Secretary and former Health and Human Services Secretary Michael Leavitt indicating the focus of the 1 PM ET event. This move underscores the administration's ongoing efforts to tackle healthcare costs, a key policy area.
Meanwhile, Federal Reserve Bank of New York President John Williams offered insights into the central bank's monetary policy and economic outlook. Williams stated that the Fed is "well positioned to gather more information" and that he doesn't have a "sense of urgency" regarding changes to monetary policy. He reiterated that the Fed's current bond buying is for managing reserves and is technical, not intended to influence long-term rates or constitute quantitative easing.
Williams characterized the current monetary policy as "mildly restrictive," deeming it helpful given that inflation remains above target. He acknowledged that recent CPI data might have been distorted downwards by about a tenth and that more data is needed to get a clear read on inflation. Despite these distortions, some of the new data has been encouraging and shows more disinflation.
On the economic front, Williams expressed confidence in the "economic basecase," projecting 1.5% to 1.75% growth for the current year, with an expectation for growth to pick up next year. He highlighted that higher productivity growth is a positive for the economy and could be disinflationary if sustained. Regarding the labor market, Williams noted that the jobs data does not indicate a sharp deterioration in hiring and that any uptick in the unemployment rate might be due to distortions rather than a fundamental shift. He also dismissed concerns about Artificial Intelligence (AI) posing a systemic financial sector risk at this time or causing structural unemployment.
In other economic news, Canada's retail sales for October showed a decline, with overall retail sales (MoM) at -0.2% (vs. -0.7% previous and 0.0% est.) and retail sales ex-auto (MoM) at -0.6% (vs. 0.2% previous and 0.0% est.).
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.