Federal Reserve Bank of New York President John Williams has thrown his weight behind further interest rate cuts this year, highlighting concerns over emerging weakness in the US labor market. In a recent interview, Williams—also the vice chair and a permanent voting member of the rate-setting Federal Open Market Committee (FOMC)—noted that while the economy is not on the brink of recession, a noticeable deceleration in monthly job growth and increased hesitancy among employers to hire warrant close attention from policymakers.

The Federal Reserve already cut rates by a quarter percentage point at its September meeting, a move aimed at keeping policy restrictive enough to curb inflation while providing some insurance against a sharper slowdown in employment. Williams underscored that the central bank must walk a fine line, ensuring inflation remains anchored near the 2% target without allowing the job market to cool too rapidly. He pointed out that, despite tariffs pushing up import prices by as much as half a percentage point, underlying inflation trends appear to be gradually easing toward the Fed’s goal, with no clear signs of second-round effects that could fuel a broader price spiral.

Williams emphasized that monetary policy remains modestly restrictive and that it would be appropriate to bring interest rates back to a neutral setting in the coming months. He also reaffirmed the Fed’s commitment to data-dependent decision-making and the importance of central bank independence, especially amid ongoing political scrutiny and pressure.

Financial markets are now anticipating another quarter-point rate cut at the Fed’s upcoming October 28–29 policy meeting. Investors and analysts will be closely monitoring US jobs data and inflation indicators for clues on the Fed’s next steps. With global economic uncertainty lingering, the trajectory of US monetary policy will remain a key focus for markets worldwide.