Fed’s Williams says it’s appropriate again to cut rates “over time”, FT By Reuters reports

(Reuters) – Federal Reserve Bank of New York President John Williams said it would again be appropriate for the central bank to cut interest rates “over time” after September’s big half-percentage-point rate cut in a interview published by the Financial Times on Tuesday.

Last week, Federal Reserve Chairman Jerome Powell indicated the bank would likely stick with a quarter-percentage point rate cut and not “rush” after new data boosted confidence in economic growth and consumer spending.

Williams, who holds a standing vote on the rate-setting Federal Open Market Committee, echoed Powell’s comments, telling the FT he did not see the September move “as the rule of thumb for how we act going forward.”

“Personally I expect it will again be appropriate to lower interest rates over time,” 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) projections that capture the totality of views, it’s a very good base case with an economy that continues to grow. and inflation returns to 2%.”

On Friday, government data showed an unexpectedly strong labor market, casting doubt on widespread concerns that the labor sector is weakening.

The wages report prompted a repricing of the Fed’s short-term interest rate cuts. Traders are now pricing in an 87 percent chance of a quarter-point rate cut next month and have eliminated any chance of a half-point cut, according to CME’s FedWatch tool.

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