Navigating Unpredictable Terrain
https://www.newyorkfed.org/newsevents/speeches/2025/wil251121
John Williams (NYFED President):
Given this backdrop, monetary policy is very focused on balancing the downside risks to our maximum employment goal and the upside risks to price stability. My assessment is that the downside risks to employment have increased as the labor market has cooled, while the upside risks to inflation have lessened somewhat. Underlying inflation continues to trend downward, absent any evidence of second-round effects emanating from tariffs. For these reasons, I fully supported the FOMC’s decisions to reduce the target range for the federal funds rate by 25 basis points at each of its past two meetings.
Looking ahead, it is imperative to restore inflation to our 2 percent longer-run goal on a sustained basis. It is equally important to do so without creating undue risks to our maximum employment goal. I view monetary policy as being modestly restrictive, although somewhat less so than before our recent actions. Therefore, I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral, thereby maintaining the balance between the achievement of our two goals.
https://www.newyorkfed.org/newsevents/speeches/2025/wil251121
John Williams (NYFED President):
Given this backdrop, monetary policy is very focused on balancing the downside risks to our maximum employment goal and the upside risks to price stability. My assessment is that the downside risks to employment have increased as the labor market has cooled, while the upside risks to inflation have lessened somewhat. Underlying inflation continues to trend downward, absent any evidence of second-round effects emanating from tariffs. For these reasons, I fully supported the FOMC’s decisions to reduce the target range for the federal funds rate by 25 basis points at each of its past two meetings.
Looking ahead, it is imperative to restore inflation to our 2 percent longer-run goal on a sustained basis. It is equally important to do so without creating undue risks to our maximum employment goal. I view monetary policy as being modestly restrictive, although somewhat less so than before our recent actions. Therefore, I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral, thereby maintaining the balance between the achievement of our two goals.
Fed Divisions Show Powell Isn’t the Biggest Hurdle to a Rate Cut
https://www.wsj.com/economy/central-banking/fed-divisions-show-powell-isnt-trumps-biggest-hurdle-to-a-rate-cut-87d88968
President Trump expects his next Fed chair to lower rates, but growing internal opposition shows the limits of a leadership change.
https://www.wsj.com/economy/central-banking/fed-divisions-show-powell-isnt-trumps-biggest-hurdle-to-a-rate-cut-87d88968
President Trump expects his next Fed chair to lower rates, but growing internal opposition shows the limits of a leadership change.
Related:
Market Uncertainty Will Continue in 2026. Here’s How Investors Can Cope
https://www.morningstar.com/financial-advisors/market-uncertainty-will-continue-2026-heres-how-investors-can-cope
Next year will test investor discipline in ways both familiar and new.
https://www.morningstar.com/financial-advisors/market-uncertainty-will-continue-2026-heres-how-investors-can-cope
Next year will test investor discipline in ways both familiar and new.