According to PANews, Federal Reserve official and ally of U.S. President Donald Trump, Williams, described the labor market over the past year as experiencing a 'moderate and gradual cooling,' while remaining robust overall. Despite a slight increase in the unemployment rate to 4.2% in July from 4.1% in June, weaker non-farm payroll data has provided room for Powell to advocate for a consensus on rate cuts.
Williams highlighted that the significant downward revisions to employment growth data for May and June are the true focus of the current report. He emphasized the importance of this information in understanding the direction of labor supply and demand, as well as the cooling trend in labor market momentum. Regarding the possibility of a rate cut in September, Williams remained cautious and did not endorse the market's expectation, which had reached as high as 80%. He stated, 'The challenges faced by market participants are similar to those we face as policymakers. I believe the market's reaction to signals is understandable.'
Williams anticipates that the U.S. economic growth will slow to about 1% this year, but he is optimistic about a potential recovery in 2026.