Fed Williams: Worried about labor market, favors further rate cuts

On October 9, according to the New York Times, Federal Reserve Williams said he supports further interest rate cuts this year, even though inflation has drifted away from the central bank's 2% target in recent months. His reasoning revolves around a labor market that has already cracked. Williams said what he wants is to prevent those cracks from deepening further. Williams said he doesn't think the U.S. economy is on the verge of recession. But he said the slowdown in monthly job growth, coupled with other signs that businesses are more hesitant to hire, is worth watching. Williams noted that the Fed has the flexibility to support the labor market because the inflation outlook doesn't look as dire as it did earlier this year. Trump's tariffs have raised some consumer prices, but he expects the impact on inflation to fade over time despite the president's new import taxes on products such as furniture and pharmaceuticals. "I'm very concerned about the risk of a further slowdown in the labor market," Williams said, adding that if the economy develops as expected - with inflation rising to around 3 percent and unemployment just above the current 4.3 percent - he would support "lowering interest rates this year, but we need to see specifically what that means."