Williams Fed Sees No High Chance of Short-Term Recession By Reuters

By Trevor Hunnicutt

SAN JUAN (Reuters) – The US economy is "in a very good place" and the likelihood of a recession in 2019 or 2020 is "not elevated," said Thursday a senior US Federal Reserve official .

"I do not worry as much about a recession as some of my private sector colleagues," said Fed Chairman in New York John Williams (NYSE 🙂 at an event in San Juan, Puerto Rico. "I still think the probability of a recession this year or next year is not high compared to a given year".

Investors have bet that the Fed should cut interest rates to avoid a slowdown in the global economy. The Fed ended sharply this year its willingness to raise interest rates, citing signs of economic slowdown, after raising rates four times in 2018.

Williams is a permanent voting member of the Fed's policy development committee and also leads the regional bank responsible for implementing the US central bank's interest rate decisions.

In addition to increasing bets on the Fed's next key rate cut, other market indicators signaled a possible slowdown.

The yield difference between three-month US dollar bills and ten-year bills, for example, turned negative last week for the first time in more than a decade. Known as the inverted yield curve, it is seen as a warning that a recession could occur in a year or two, which has already happened in the past when the market launched a signal of this type.

Williams said the Fed was closely monitoring these market indicators, but had suggested that the yield curve would not predict a recession this time around. He described monetary policy as "in the right place".