New York Federal Reserve President John Williams announced at a prominent event on Monday that the Federal Reserve is poised to lower interest rates “eventually” as it steadily moves closer to reaching its 2 percent inflation goal.
Mr. Williams addressed attendees at the Milken Institute 202 Global Conference in Beverly Hills, California, where he reassured financial markets and brushed aside worries regarding a potential rate hike. Instead, he asserted that monetary policy is currently well-positioned and capable of managing inflation, despite the data suggesting an acceleration.
The head of the regional central bank opted not to provide a timeline for when his fellow officials might agree to decrease the benchmark interest rate.
“Eventually, we’ll have rate cuts,” he said, adding that “policy is in a very good place, and we have the time to collect more, so steady as she goes.”
“But it’s really looking at all the data,” Mr. Williams explained.
Last week, the Fed left the benchmark federal funds rate at a range of 5.25 percent and 5.5 percent.
Investors had concerns that the institution might indicate an impending rate hike. Nonetheless, Fed Chair Jerome Powell alleviated these worries by informing markets that it’s “unlikely” policymakers will increase interest rates.
“I think it’s unlikely that the next policy rate move will be a hike. We don’t see evidence that policy isn’t restrictive,” Mr. Powell told reporters at the post-meeting press conference.
Now, the futures market is predicting two quarter-point rate cuts for this year, with the first potential shift occurring at the September policy meeting.
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