New York Fed President John Williams said that case for rate cut is getting stronger. And, market expectation on Fed’s rate cut are already helping spending.
He said “if anything, relative to earlier in the year, the conditions, the arguments for adding policy accommodation have strengthened over time, and I think that’s the way I continue to view it.” And, “the markets expect cuts so therefore you see lower mortgage rates, you see lower interest rates, and stronger financial conditions broadly, and I think that contributes to more consumer spending and business spending.”
On the economy, he said it’s in a “good place” but appears now to be “growing at a more moderate pace” than last year”. He pointed to the uncertainties, “especially related to trade and global growth”. And, “we have issues around inflation expectations being soft, obviously inflation continuing to run below 2%.”