He described the current monetary policy as “modestly restrictive” and said he sees “room for a further adjustment in the near term

FPJ News Service mumbai

The US Federal Reserve can still cut interest rates “in the near term” without putting its inflation goal at risk, New York Fed president John Williams said on Friday. Progress on inflation has “temporarily stalled,” Williams acknowledged in comments prepared for delivery at a Central Bank of Chile event, and added it was "imperative to restore inflation to our 2% longer-run goal on a sustained basis,” from a current level that he estimates to be around 2.75%, international news agencies and portals reported quoting Williams.

Despite the pause in inflation progress, Williams expressed confidence that price pressures would ease as tariff impacts work through the economy without creating persistent inflation. He also pointed to signs of softening in the labor market, noting September’s unemployment rate rose to 4.4%, comparable to pre-pandemic levels "when the labor market was not overheated.”

Williams described current monetary policy as “modestly restrictive” and said he sees “room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral.”

This approach would maintain balance between the Fed’s dual goals of price stability and maximum employment. His comments come amid ongoing debate among Fed officials about whether to cut rates at the upcoming December 9-10 meeting.