After a disappointing jobs report, two Federal Reserve officials stated on Friday that it is time to start reducing the benchmark federal funds rate. Both Federal Reserve Governor Christopher Waller and New York Federal Reserve President John Williams expressed their support for a decrease at the upcoming meeting of the Federal Open Market Committee.
During a meeting of the Council on Foreign Relations in New York, Waller stated, “Considering our progress in controlling inflation and stabilizing the labor market, I believe it is appropriate to lower our target range for the federal funds rate at our next meeting.” Similarly, Williams also agreed during this event by saying that with inflation approaching 2% and economic stability achieved, it is necessary to reduce restrictions by lowering rates.
According to Reuters’ report on Friday’s event, there is now a 77% chance that there will be a 25 basis point cut during Fed’s Sept.17-18 gathering. However Eugenio Aleman from Raymond James warned against making too large of cuts as they could send misleading signals to markets.
Pictured: The headquarters of New York’s branch of The Federal Reserve System.
