Fed's Williams: Ready to Start Rate Cuts, Time to Lower Fed Funds Rate

Sep 6, 2024, 12:47 PM

Federal Reserve Bank of New York President John Williams announced that it is now appropriate to lower the Fed funds rate and that he is ready to start the process of rate cuts. Williams cited a better balanced economy and the cooling of inflation pressures as key factors for this decision. He expects the unemployment rate to be around 4.25% by the end of the year and to settle around 3.75% in the longer run. Williams also forecasts US GDP growth to be between 2% and 2.5% for this year, with inflation at 2.25% and near 2% next year. He emphasized that the job market is in better balance and not a main source of inflation, and that inflation expectations remain well anchored. Williams expressed confidence in the effectiveness of Fed policy in restoring price stability and welcomed the disinflation trends.