Source: Zhitong Finance
New York Federal Reserve Chairman Williams said that although economic data will determine the policy trend of the Federal Reserve, he currently does not feel the urgency of cutting interest rates.
On Thursday, New York Federal Reserve Chairman Williams, the “top three” of the Federal Reserve and who has permanent FOMC voting rights, said that although economic data will determine the Fed's policy trends, he does not feel the urgency of cutting interest rates at present. Williams pointed out in a media event that monetary policy is currently in an advantageous position, and interest rates are gradually pushing inflation closer to the central bank's target.
Williams pointed out that considering the rebound in many US inflation indicators, the market has recently adjusted the expected time for the Fed to cut interest rates for the first time. Federal Reserve Chairman Powell also pointed out on Tuesday that the bank may maintain its current policy status longer than planned. Although Williams himself did not regard further interest rate hikes as a baseline scenario, he did not rule out this possibility, particularly if economic data showed that it was necessary.
Notably, Williams' speech today was more “hawkish” than his speech on Monday. In his earlier speech, he pointed out that the latest inflation data was not a decisive turning point. He has stated that he will pay close attention to subsequent data to adjust his views and predictions.
Furthermore, Williams also stressed that no matter who heads the White House, the Federal Reserve's focus will be on achieving the goals of maximizing employment and stabilizing prices. He believes that keeping inflation low is the cornerstone of economic prosperity, and focusing on a 2% inflation target is the right choice.
Meanwhile, Atlanta Federal Reserve Chairman Bostic expressed similar views. He said that although inflation is higher than the Federal Reserve's 2% target, he believes the current monetary policy stance is sufficient to gradually achieve this target. Bostic said he is open to keeping interest rates stable and reiterated that he believes it is inappropriate to lower borrowing costs before the end of the year.
Bostic stressed that despite the economic slowdown, business and consumer conditions in the US are better than the usual economic cycle, and he remains optimistic about this. Meanwhile, market traders now expect only one to two interest rate cuts this year. This is far from the six rate cuts expected at the beginning of the year and the three interest rate cuts predicted by Federal Reserve officials a month ago.