Federal Reserve "Three Musketeers" Williams: US economy strong, rate cut needs more data
New York Fed President Williams of the Federal Reserve Bank stated that the U.S. economy is moving in the right direction, but he refused to disclose when he might lean towards cutting interest rates. He emphasized that the decision to cut interest rates will depend on the upcoming economic data. Williams expects inflation to continue to weaken, with supply and demand approaching a balance. Despite a slowdown in employment, the economy and labor market remain strong. Fed officials have lowered their expectations for the magnitude of interest rate cuts this year, expecting one rate cut. Williams stated that the most important thing is to make the right decision, regardless of political factors
According to the financial news app Smart Finance, John Williams, the President of the Federal Reserve Bank of New York, known as the "third in command of the Fed" and enjoying permanent voting rights on the FOMC, stated that the U.S. economy is moving "in the right direction," but refused to disclose when he would support a rate cut.
Williams emphasized that any decision regarding the timing or extent of policy easing this year will depend on the upcoming economic data. He mentioned that recent inflation data is encouraging, and he expects price pressures to continue to ease.
In an interview on Tuesday, Williams stated, "There are good signs that supply and demand are moving towards balance." "I do see a disinflationary process continuing, and I expect inflation to continue to decline in the second half of this year and next year."
Despite a slowdown in employment, Williams described the U.S. economy and labor market as strong.
Williams noted that while household data shows signs of weakness, employment data from business surveys remains very strong. He mentioned that the employment report "may be a bit overstated." He stated that the Fed will learn more about the situation in the coming months.
According to forecasts released last week, Fed officials lowered their expectations for the magnitude of rate cuts this year, with officials expecting a median of only one cut. Policymakers also kept the benchmark interest rate unchanged in the target range of 5.25% to 5.5%, the highest level in 20 years reached in July last year.
Last month, Williams stated that there is "compelling evidence" that the Fed's current policy is putting pressure on the economy, and he expects inflation to continue to cool in the second half of this year.
The chairman also avoided a question about whether the Fed could cut rates this fall without facing accusations of political bias.
He said, "The most important thing is to make the right decision," "without considering political factors."