Fed official backs further rate cuts this year

VTV.vn - New York Fed President John Williams expressed support for continuing to cut interest rates this year, despite internal divisions within the Fed due to concerns about rising inflation risks.

In a recent interview with the New York Times, just three weeks before the next policy meeting of the US Federal Reserve (Fed), New York Fed President John Williams said he supported further interest rate cuts this year, despite concerns from some policymakers about rising inflation, suggesting such a decision would not be easy to make.

Williams said he was concerned about the risk of a further slowdown in the labor market. He also said that the trade tariffs imposed by President Donald Trump have not put as much upward pressure on inflation as many observers had predicted. He sees more risk in the labor market, which is helping to reduce pressure on inflation.

But at a time when recent data point to stronger economic growth and consumer spending fueled, at least in part, by the stock market, other Fed policymakers are wary of cutting rates. In his first speech on monetary policy since June 2025, Fed Governor Michael Barr on October 9 emphasized inflation risks, even as he acknowledged potential weaknesses in a “relatively balanced” labor market. He said the Fed needs to be cautious about adjusting policy so it can collect more data, update its forecasts and better assess the risks.

The apparent disagreement between the two Fed officials comes just weeks after the Fed voted 11-1 to cut its policy rate by 0.25 percentage points to counter potential weakness in the labor market. The only dissent came from new Fed Governor Stephen Miran, who favored a more aggressive rate cut.

Updated forecasts from Fed policymakers released on September 17 and minutes released on October 8 showed that Fed officials may have been more divided than the vote indicated, with a few participants at last month’s meeting saying no rate cuts were appropriate. However, a majority of the Fed’s 19 policymakers felt that at least two quarter-point rate cuts were needed by the end of the year.

Financial markets also reflect that expectation, showing a 95% chance the Fed will cut interest rates by 0.25 percentage points, to 3.75-4% at its meeting on October 28-29.

Source: https://vtv.vn/quan-chuc-fed-ung-ho-viec-tiep-tuc-cat-giam-lai-suat-trong-nam-nay-100251010152734633.htm