Fed hints at possible rate cuts soon, says New York Fed President
New York Fed President John Williams says the central bank could lower interest rates soon without putting its 2% inflation goal at risk.
He described current policy as "modestly restrictive" and suggested there's room to adjust for a better balance between stable prices and jobs.
Quick catch-up: What's going on?
Inflation is stuck at about 2.75%, which is still above the Fed's target, but Williams wants to restore inflation to the Fed's longer-run goal of 2%, but did not specify a timeline.
Tariffs have bumped up prices a bit, but he doesn't see them causing long-term inflation problems.
The economy has slowed down, and unemployment is now around 4.4%—pretty close to where it was before the pandemic.
The Fed has already cut rates twice at its past two meetings to balance risks to employment and inflation.
What's next?
Williams emphasized that bringing inflation down sustainably matters most, but not at the cost of jobs.
His comments suggest more rate cuts could be on the table soon, though he made it clear they'll keep things cautious with all the uncertainty out there.