Fed’s Williams Says Current Rates Support Economic Goals as Inflation Eases
New York Fed President John Williams affirmed the central bank's monetary policy stance is effectively balancing price stability and employment growth. Speaking at the Council on Foreign Relations, Williams noted the 75 basis point rate cut in 2025 has positioned the federal funds rate at 3.5%-3.75%, calling it "well positioned" to guide inflation toward the 2% target while maintaining labor market stability.
Projections show inflation declining to 2.5% in 2026 before reaching the Fed's target by 2027, with unemployment expected to hold steady before gradual improvement. The Fed anticipates only one additional quarter-point cut in 2026, suggesting a measured approach to policy normalization.