The Fed is not really talking about cutting interest rates, and the topic is premature. ”
New York Fed President Williams, the Fed's "third-in-command," said on FridayRate cuts are not currently on the Fed's agenda, and there is no real discussion of them.
He said
"We're not talking about rate cuts right now, we're very focused on the issues that lie ahead of us, as Chairman Powell said......Has our monetary policy taken a sufficiently restrictive stance to ensure that inflation falls back to 2%?This is the question before us. ”At the time of Williams' hawkish speech,** At one point, he dived $17, existing institute **.
In the wake of Fed Chair Jerome Powell's dramatic shift on ThursdayThe Dow surged to record levels this week, the yield on the 10-year Treasury note fell below 43%。Traders believe that the Fed's expected three rate cuts next year suggest that the central bank is changing its hawkish stance and will start cutting rates earlier than expected next year.
According to Fed, traders are also betting that the Federal Reserve will cut interest rates more than three times next year. **Markets are also suggesting that the Fed could start cutting interest rates as early as March next year. When asked about market pricing,"I think it's too early to think about this, and we're going to cut rates again if necessary," Williams said. ”
The Fed's "third-in-command" added that the Fed will continue to rely on dataIf the trend of slowing inflation reverses, it is ready to tighten policy again.
On Thursday, the Federal Reserve left its key interest rate unchanged for the third time in a row, and its release showed that the Fed will cut interest rates to 4 by the end of 2024The median is 6%, which means that it will cut rates three times by 25 basis points next year.
"It looks like we're at or near that limit, but that could change," he said. One thing we've learned over the past year is that data can change in surprising waysIf inflation progress stalls or reverses, we need to be prepared for further tightening
Fed Megaphone," Nick Timiraros noted, Williams' remarks saidThe Fed is focused on whether it is doing enough to raise interest rates, which is clearly a rebuttal to the tone of the rate cut at the Fed's press conference on Thursday. Rate cuts are "not a topic of discussion about what we are going to do".
The Fed expects its favorite inflation gauge, the core PCE price index, to fall to 24%, further to 2 by 20252%, eventually reaching the 2% target by 2026. The index rose 3% year-on-year in October5%。Williams said
"We're definitely going to see inflation slowing down. Monetary policy is working as intended, and we must ensure that it is ......Inflation continued to pick up to 2%. ”