Fed "third-in-command" Williams: A timely rate cut is an appropriate move.

On September 5, New York Fed President Williams stated that he predicts that interest rate cuts will "become appropriate over time," but did not specify the timing or pace of such actions. In a speech prepared for an event with the New York Economic Club, Williams said, "Looking ahead, if our dual mandate goals continue to make progress according to my baseline forecast, I expect that shifting interest rates to a more neutral stance will be appropriate over time." Williams noted that the Fed is facing a "delicate balance" regarding employment and inflation risks. He said, "On one hand, we need to keep the labor market balanced to ensure that the impact of tariffs does not spill over into a more persistent broad rise in inflation. On the other hand, maintaining a position of 'too tight of a policy for too long' could pose risks to our maximum employment mandate." He also stated that so far, the impact of tariffs on inflation has not been as severe as initially feared, but added that "it is still too early, and the effects of tariffs will take time to fully materialize." (Jin10)