Williams: Current monetary policy is fully prepared for 2026

John Williams, president of the Federal Reserve Bank of New York, said monetary policy was well prepared for next year. Just last week, the Fed cut interest rates amid rising employment risks and a slight reduction in inflation risks. "Monetary policy is very focused on balancing these risks. To that end, the FOMC has pushed the otherwise slightly restrictive stance of monetary policy towards neutrality," the New York Fed president said growth should accelerate to about 2.25 per cent next year, up from 1.5 per cent projected for 2025, thanks to fiscal policy support, "favourable financial conditions" and investment in artificial intelligence. He added that he expected inflation to fall to just under 2.5 per cent next year before hitting the Fed's 2 per cent target in 2027.