The president of the Federal Reserve of New York, John Williams, indicated that interest rate cuts may occur on a closer horizon, even as inflation advances show signs of stagnation.
Williams emphasized that the current monetary policy remains “moderately tight,” pointing out that a loosening of financial conditions continues to be a possibility if the economic scenario demands it.
Although the pace of inflationary deceleration has lost strength, he reiterated the Fed's expectation that inflation will return to the 2% level by 2027, in line with the institution's long-term projections.
The statements come as markets readjust their bets for the interest rate decisions in December and early 2026, in an environment of reduced clarity in indicators following the U.S. government shutdown and renewed doubt about the resilience of the labor market.
