New York Federal Reserve President John Williams said Friday he expects the central bank can lower its key interest rate from here as labor market weakness poses a bigger economic threat than higher inflation.
With divisions in the central bank running high over the future of rates, Williams took the side of the doves who still see policy as a bit restrictive when it comes to economic growth.
“I view monetary policy as being modestly restrictive, although somewhat less so than before our recent actions,” he said in remarks for a speech in Santiago, Chile. “Therefore, I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral, thereby maintaining the balance between the achievement of our two goals.”
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