Fed's Williams: In support of further interest rate cuts this year

Federal Reserve (Fed) Bank of New York President John Williams told the NY Times that he supports further interest rate cuts this year, per Reuters.

Key takeaways

"Did not believe the economy was on the verge of a recession."

"Slowdown in monthly jobs growth, coupled with other signs that companies are more hesitant to hire, warrants attention."

"In terms of inflation, my view is that the tariffs have increased imported goods prices."

"Fed had flexibility to shore up labor market because inflation outlook did not appear as dire as it did earlier in the year."

Tariffs have boosted inflation by maybe a quarter of a percentage point, up to a half point, in terms of the price level."

"Underlying inflation seems to be moving gradually lower toward 2 percent."

"I don't see any signs of second-round effects or factors that could be amplifying the effects of tariffs on inflation."

It was appropriate to bring interest rates back to a neutral setting."

"Monetary policy is still modestly restrictive"

Market reaction

These comments received a neutral/dovish score of 4.2 from FXStreet Fed Speech Tracker. Meanwhile, the US Dollar (USD) preserves its strength against its peers. At the time of press, the USD Index was up 0.15% on the day near 99.00.