Fed's Williams says rate cuts likely to happen 'later this year'
(Reuters) -New York Federal Reserve President John Williams sees the U.S. central bank on track to cut interest rates «later this year,» despite stronger-than-expected inflation and labor market data in January, according to an interview with Axios.
«My overall view of the economy basically hasn't changed based on one month of data,» Williams said in an interview that was conducted on Thursday and published on Friday, noting that inflation's progress toward the Fed's 2% goal can be «a little bit bumpy,» but that overall it and the economy more broadly are headed «in the right direction.»
«At some point, I think it will be appropriate to pull back on restrictive monetary policy, likely later this year,» Williams said, remarks that are in synch with those of other Fed policymakers who have been sounding somewhat cautious lately about starting to cut rates without more confidence on inflation's downward trajectory.
As vice chair of the Fed's rate-setting Federal Open Market Committee, Williams is an influential voice at the U.S. central bank, which has held its benchmark overnight interest rate steady in the 5.25%-5.50% range since last July.
He did not give any sense of his preferred timing for the start of rate cuts, nor of exactly what would trigger them, apart from an overall assessment that inflation is indeed headed sustainably toward the 2% target.
«It's really about reading that data and looking for consistent signs that inflation is not only coming down, but is moving towards that 2% longer-run goal,» he told Axios. «I don't think there's any formula, or one indicator, or something that will tell you that. It's really looking at all the information together, including these signs in the labor market and others
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