New York Fed's Williams signals little urgency for further rate cuts

John C. Williams, president of the Federal Reserve Bank of New York, said on Monday he saw little urgency to lower interest rates again, reinforcing expectations that the Fed will hold borrowing costs steady at its meeting on Jan. 27–28.

Williams said the central bank was "well positioned" to shore up the labor market and ensure inflation eased back to the Fed's 2 percent target after three quarter-point reductions last year. He noted interest rates, which now stand between 3.5 percent and 3.75 percent, were "closer to neutral." Speaking at an event hosted by the Council on Foreign Relations, he defended Chair Jerome H. Powell as "completely dedicated" and of "impeccable integrity," and warned that jeopardizing the Fed's independence could produce "unfortunate outcomes" such as a less stable economy and higher inflation.

Tensions have risen after the Justice Department opened a criminal investigation into Mr. Powell, centered on his oversight of a $2.5 billion renovation of the Fed's headquarters, and Mr. Powell accused the administration of using legal threats to press for lower borrowing costs. A pause at the Fed's Jan. 27–28 meeting would keep the central bank at odds with President Trump, who has urged much lower rates.

Key Topics

Business, Federal Reserve, John C. Williams, Jerome Powell, Justice Department, Inflation