New York Fed President: Research Points To 'Very Strong Economy,' Fed Open To Re-Evaluating Policy

Major U.S. stock indices rallied higher Friday morning, in part due to supportive comments from New York Federal Reserve President John Williams.

What Happened

CNBC's Steve Liesman posed a simple question to Williams in a Friday interview: are you listening to the message the market is conveying?

Williams replied that the Federal Reserve is very much "listening to the message of the market," but is simultaneously looking carefully at all data readouts and conversing with business leaders across the country.

The combined research points to a "very strong economy" that's on track for around 3-percent growth in 2018, he said. The Federal Reserve is committed to continue listening to market participants who express concern with growth, Williams said.

"What we are going to be doing coming into next year and through next year is re-assessing the views of the economy — listening not only to markets but everyone we talk to."

Why It's Important

The Federal Reserve is open to re-evaluating its policies based on new data, Williams said.

This view is somewhat reflected in the statement released by the Federal Reserve in conjunction with its rate hike this week. For example, the language was changed from "expects further gradual increases" in 2019 to include the word "judges."

"If you look up in the dictionary, judges means we made an opinion," Williams told CNBC. "It's our judgment or opinion that is where we see things going. This is not a commitment or promise or in any way a sense that we know for sure that is what we are going to do."

What's Next

The Federal Reserve's 2019 outlook is based on the "pretty optimistic view" it has today of the economy, and it can be "changed as needed" moving forward, Williams said.

The Dow Jones Industrial Average was up 0.18 percent at 22,900.85 at the time of publication Friday.

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Screenshot courtesy of CNBC.