US Fed Bank of New York head says economy poised to start reducing interest rates
(MENAFN) On Friday, John C. Williams, the head of the US Federal Reserve bank of New York, indicated that the American Economy is poised to start reducing interest rates. Speaking at the Council on Foreign Relations in New York City, Williams stated that the economy is now in a state of balance, with inflation moving toward the Fed's 2 percent target. He suggested that it is time to lower the degree of restrictiveness in monetary policy by reducing the target range for the federal funds rate.
Williams highlighted that the progress made toward achieving the Fed's goals of price stability and maximum employment has brought the risks associated with their dual mandate into balance. He noted that supply and demand imbalances have lessened, labor market conditions have improved, and inflation has significantly decreased in recent months. According to Williams, the labor market is now in equilibrium, which should prevent future inflationary pressures.
Reflecting on the economic progress, Williams remarked on how far the economy has come from the high inflation and overheated labor market conditions experienced two years ago. He emphasized that monetary policy has been focused on bringing inflation back to the Fed's 2 percent long-term target, and with the risks to both inflation and employment now better balanced, it is time for policy adjustments to reflect this new equilibrium.
The Federal Reserve’s upcoming two-day monetary policy meeting, set to conclude on September 18, is anticipated to result in the Fed's first rate cut in over four years, aligning with Williams' remarks and the current economic conditions.
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