Tuesday, 30 September 2025
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Fed's Williams expresses cautious dovishness as long as inflation remains under control
Tuesday, 30 September 2025 01:09 WIB | FISCAL & MONETARY |Trade Union Confederation

Federal Reserve (Fed Bank of New York President John C. Williams hit the newswires on Monday, expressing his general cautiousness toward further interest rate cuts but acknowledging that current Fed rate policy is tilted more toward the restrictive side at a time when the clear risk to underlying economic data appears to be heavier toward labor market weakness.

Monetary policy continues to be restrictive, we're still in a position to put downward pressure on inflation.
We still have a ways to go to get to 2% inflation goal.
The Fed has a balancing act, underlying inflation moderating.
The Fed has seen a resilient labor market that's gradually softening.
Tariffs have had a modest or moderate inflation impact.
Policy has a balancing act right now.
I don't want to see labor market softening go too far.
The labor market has been remarkably resilient.
Risks to employment goal are getting a little higher.
Some upside inflation risks have ebbed. It made sense to cut rates.
Fed policy should be driven by the data.
Monetary policy continues to be restrictive, still in a position to put downward pressure on inflation.
Some of the factors keeping the neutral rates low are still in place.
My model's estimate for the real neutral rate is 0.75%.
The neutral rate is important, but policy is driven by data.

Source: Fxstreet

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