John Williams, president of the Federal Reserve Bank of New York, highlighted the decline in business and consumer sentiment due to uncertainties related to trade and fiscal policies. While he anticipates a slowing economy for the year, he noted that underlying growth remains strong despite volatility in the first quarter. Business surveys indicate a shift from optimism to caution, with household confidence declining. However, Williams dismissed the possibility of a recession in 2025, emphasizing the strength of the labor market and the need for hard data to adjust interest rate policies.
John Williams noted that while uncertainty around trade and fiscal policies has negatively impacted business and consumer sentiment, hard data hasnât yet reflected a downturn.
Despite the first quarterâs volatility due to trade tensions, Williams emphasizes that strong underlying growth in the economy is still evident.
Williams expressed concerns over shifting business surveys from optimism to cautiousness, compounded by declining household confidence, mainly due to unemployment fears.
While acknowledging expected economic slowing, Williams ruled out a recession for 2025, noting strong labor market conditions despite uncertainty.
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