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The Federal Reserve's Williams said he believes interest rates will eventually decline.
The US Federal Reserve believes that tariffs will not have a material impact on inflation, and the current labor market is far from reaching a serious level of tension; future inflation risks are lower than before.
Mr. Williams said that by shrinking the balance sheet, the Fed had essentially reduced the level of bank reserves to "adequate" levels. "We have now basically reached that level," Mr. Williams said of the theoretically adequate level of bank reserves, which prompted the Fed to resume bond purchases last week, or so-called "reserve management purchases". Mr. Williams noted that bank reserves had to be built up gradually as banks demanded them.
The Fed's decision to cut interest rates last week was the right thing to do, but the next move was difficult to judge, Mr. Williams said on Monday. Speaking to reporters at an event in Jersey City, New Jersey, Mr. Williams said: "I very much support our decision" to cut the Fed's base rate by 25 basis points. Looking ahead to the January 27-28 policy meeting, he said: "We will wait and collect all relevant data" and it is "too early to tell what to do with the next monetary policy decision".
New York Federal Reserve President William Williams said there is no investment boom outside of AI; productivity is expected to be above average in the next 5-10 years.
John Williams, president of the Federal Reserve Bank of New York, said monetary policy was well prepared for next year after the Fed cut interest rates last week 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 an otherwise slightly restrictive monetary policy stance towards neutrality," the New York Fed president said. Thanks to the support of fiscal policy, "favorable gold...
