Jim Grant, founder and editor of the Grant Interest Rate Observer, discusses the financial uncertainty facing the Federal Reserve on “Maria Bartiromo’s Wall Street.”
federal reserve Bank of New York President John Williams said Monday that the central bank’s next action would likely be to cut interest rates, but he did not say when.
“Eventually there will be rate cuts,” Williams said in comments ahead of the Milken Institute’s 2024 World Congress in Beverly Hills, Calif., but that monetary policy is in “a very good place” for now. Stated.
His comments came after last week’s meeting of the Federal Open Market Committee (FOMC), which decides monetary policy. Fed officials kept the benchmark federal funds rate in the range of 5.25% to 5.5%, indicating it would likely remain there for an unspecified period of time as they explore further rate hikes. . Evidence that inflation is falling Toward the central bank’s 2% target.
Williams, who holds a vote on the FOMC, did not offer a timeline for lowering interest rates from 23-year highs, given the Fed’s preferred measure is that inflation is trending at 2.7%, well above target. Ta. rate. Excluding food and energy, underlying core inflation rose further to 2.8%.
Fed leaves interest rates unchanged as inflation casts doubt on future rate cuts
New York Fed President William Williams said the central bank’s next action is likely to be to lower interest rates, although the timing is unclear. (Al Drago/Bloomberg via Getty Images/Getty Images)
He said he expects U.S. gross domestic product (GDP) to rise 2% to 2.5% this year. the economy expanded Last year it progressed even more rapidly.
Williams also said the Fed’s efforts to reduce the size of its balance sheet are on track and have not disrupted financial markets.
A statement after last week’s meeting of FOMC policymakers said they would need “more confidence” that inflation is falling before easing monetary policy. “There has been no further progress towards the Committee’s 2% inflation target in recent months,” it added.
US economy adds 175,000 jobs in April, much weaker than expected
Fed Chairman Jerome Powell said recent setbacks in anti-inflation efforts were not a reason to raise rates. (Alex Wong/Getty Images/Getty Images)
Federal Reserve Chairman Jerome Powell He said the Fed is unlikely to raise rates in response, despite signs that inflation may not be coming down as quickly as expected or may even be trending upward.
“I think it’s unlikely that the next policy rate decision will be a rate hike,” Powell said after last week’s meeting. “We see no evidence that the policy is not restrictive.”
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FOX Business’ Megan Henney and Reuters contributed to this report.
