New York Fed President John Williams said in a speech yesterday that monetary policy will need to “move to a more neutral policy setting over time.”
However, he refrained from offering firm guidance on the timing of rate cuts, including whether a December adjustment might be appropriate.
Williams highlighted the uncertainty inherent in economic forecasting, noting that “the path for policy will depend on the data.”
Despite the ambiguity, Williams painted a relatively optimistic picture of the US economy, describing it as in a “good place” with a “strong” labor market.
He projected economic growth of 2.5% or more for the year, with unemployment expected to stabilize between 4% and 4.25% in the coming months. Inflation is anticipated to end the year at 2.25%, with no significant upward pressure from the labor market.
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