Federal Reserve Bank of New York President John Williams said he doesn’t see a need for officials to tighten policy further and reiterated that he expects the central bank to cut rates later this year.
Williams acknowledged that inflation has retreated from multi-decade highs, but he emphasized officials want to see inflation return to 2% and remain there on a sustained basis.
“I expect us to cut interest rates later this year,” he said Thursday in a fireside chat at the Citizens Budget Commission’s annual gala in New York. “We’re going to move interest rates back to more normal levels.”
The remarks echoed those Williams has made recently, including at a separate event Wednesday.
A bevy of Fed officials, including Chair Jerome Powell, have made clear in recent weeks they don’t see a need to rush rate cuts given the underlying resilience of the economy and labour market, and lingering risks to their inflation outlook. That patient approach has been validated by recent data showing price pressures remain elevated.
The Fed’s preferred gauge of underlying inflation rose 0.4% in January, the fastest pace since early 2023, government data released Thursday showed. Those figures followed stronger-than-anticipated consumer price data released earlier this month.
