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Fed’s Waller, Williams Signal Upcoming Rate Cut
Following a weaker-than-expected jobs report, two Federal Reserve policymakers on Friday said separately that the time has arrived to begin lowering the benchmark federal funds rate. Federal Reserve Governor Christopher Waller and New York Federal Reserve President John Williams each backed a reduction at the Federal Open Market Committee meeting later this month.
“Considering the achieved and continuing progress on inflation and moderation in the labor market, I believe the time has come to lower the target range for the federal funds rate at our upcoming meeting,” Waller said in prepared remarks at a meeting of the Council on Foreign Relations in New York.
Similarly, Williams said Friday at the same event, “With the economy now in equipoise and inflation on a path to 2%, it is now appropriate to dial down the degree of restrictiveness in the stance of policy by reducing the target range for the federal funds rate.” He called the jobs report for August “consistent with what we’ve been seeing — a slowing economy and a cooling off in the labor market.”
Reuters reported that futures traders now assign a 77% probability to the Fed cutting the federal funds rate by 25 basis points at its Sept. 17-18 meeting. A larger cut than that would “send an incorrect signal to the market,” Eugenio Aleman, chief economist at Raymond James, told Reuters Friday.
Pictured: Federal Reserve of New York.
- ◦Economy
