New York Fed President Williams Anticipates Restrictive Monetary Policy to Continue

According to Yahoo News, New York Federal Reserve Bank President John Williams has reiterated that the Fed's benchmark lending rate is at or near its peak level, describing the current monetary policy as 'quite restrictive.' He stated that rates are estimated to be the most restrictive in 25 years during his remarks at the Bretton Woods Committee conference at the New York Fed. Williams expects that maintaining a restrictive stance for an extended period will be necessary to restore balance and achieve the 2% longer-run inflation goal on a sustained basis. Federal Reserve officials are likely to keep interest rates steady during their meeting next month, allowing more time to assess the economy after raising rates aggressively from near zero in March 2022 to above 5% in July. Meanwhile, bond traders have increased their bets on a sudden end to the central bank's tightening cycle, with the first interest-rate cut anticipated by May. Data released on Thursday revealed that US consumer spending slowed in October compared to the previous month as inflation continued to ease, indicating a shift to a lower gear for the economy. The core personal consumption expenditures price index, which excludes volatile food and energy components, increased by 0.2% last month, with the Federal Reserve's preferred measure of underlying inflation rising 3.5% year-over-year.