Fed’s Williams sees monetary policy as restrictive, no rush to adjust

New York Federal Reserve President John Williams stated on Thursday that there is “ample evidence” that the current monetary policy is having a restrictive impact, signaling a cautious stance on any immediate changes to interest rates.

The official noted that while the Fed does not know exactly when it will cut rates, any such decision will be data-dependent.

The central bank representative emphasized that there is no urgency to adjust the monetary policy at present.

This suggests that the Federal Reserve is inclined to maintain the current interest rate levels until substantial economic indicators prompt a policy change.

Moreover, the official pointed out that achieving a 2% inflation rate is not a prerequisite for the Fed to consider lowering rates. 

The Fed’s official also expressed an expectation that shelter inflation, which has been a significant component of overall inflation, will continue to decrease.

This trend is seen as a positive sign for the economy, potentially easing inflationary pressures in the housing sector.

Looking ahead, the Federal Reserve forecasts that inflation will reach the target 2% rate in early 2026.