(Reuters) -Federal Reserve Bank of New York President John Williams said in an interview published by the Financial Times that it will again be appropriate for the central bank to cut interest rates “over time” after the major rate cut in half a percentage point in September. Tuesday.
Last week, Federal Reserve Chairman Jerome Powell indicated the bank would likely stick with a quarter-percentage-point rate cut and was in no “hurry” after new data boosted confidence in economic growth and consumer spending.
Williams, who is a permanent vote on the rate-setting Federal Open Market Committee, echoed Powell’s comments, telling the FT that he does not see the September measure “as the rule for how we will act in the future.”
“I personally expect that in time it will be appropriate to cut interest rates again,” he told the FT.
“Right now I think monetary policy is well positioned for the outlook, and if you look at the SEP [Summary of Economic Predictions] According to projections that reflect the aggregate of views, it is a very good base case with the economy continuing to grow and inflation returning to 2 percent.”
On Friday, government data showed an unexpectedly strong labor market, casting doubt on widespread concerns about the weakening of the labor sector.
The payroll report led to a repricing of the Fed’s short-term interest rate cuts. Traders now estimate an 87% chance of a quarter-point rate cut next month, and have ruled out any chance of an excessive half-point cut, according to CME’s FedWatch tool.
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(Reporting by Shubham Kalia in Bengaluru; Editing by Kim Coghill & Shri Navaratnam)
