John Williams, President of the Federal Reserve Bank of New York, recently underscored the importance of maintaining high interest rates for managing inflation and achieving the central bank’s 2% target. His remarks were made during a speech at Queens College this Wednesday.
The upcoming Federal Reserve rate-setting meeting, scheduled from October 31 to November 1, is expected to uphold the short-term interest rate target range of 5.25% to 5.5%. This stance aligns with the Fed’s active policy of raising interest rates from a near-zero federal funds target rate range since spring of the previous year.
Williams acknowledged the progress made in managing inflation but emphasized the need for further action. He suggested considering rate reductions once inflationary pressures start to ease.
While there are indications that the Fed might be nearing the peak of its interest rate cycle, Williams refrained from making definitive predictions. Instead, he assured that any decisions would be driven by data. Expressing optimism about the future, he indicated a potential return to a pre-COVID-19 low-inflation environment.
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