fomc

John Williams, President of the Federal Reserve Bank of New York, expressed strong confidence that the current U.S. interest rates are well-calibrated for today's economic conditions. He believes they will support sustainable growth, job creation, and help the central bank reach its 2% inflation target.
"Our monetary policy is in a strong position," Williams stated during his speech at the Council on Foreign Relations in New York. He added that the Fed now has better control over the risks threatening its dual mandate of full employment and price stability.

After Rate Cuts, the Fed Plans a Cautious Approach
His comments came shortly after the FOMC (Federal Open Market Committee) decided to cut rates by 75 basis points in 2025. Williams is among those advocating a cautious strategy, suggesting the Fed should wait for more data before making further moves.
According to him, it's essential to monitor the labor market, which he said is returning to pre-pandemic levels:

“The recovery is gradual – without signs of mass layoffs or sudden economic downturns,” he assured.
He also added that unemployment will likely remain stable this year and gradually decline over the next few years.

Trump's Tariffs Seen as Temporary Inflation Spike
Williams also commented on the tariffs imposed by the Trump administration, calling them a one-time price shock. He expects inflation to peak between 2.75% and 3% in the first half of the year, but then drop to 2.5% by year-end, with the economy maintaining above-average growth.

A Divided Fed: Not Everyone Supports Rate Cuts
The Fed's December meeting minutes revealed a split among committee members. Some favored a 25-basis-point rate cut, while others preferred keeping rates unchanged.
The minutes, released on December 30 in Washington, highlighted internal hesitation:

“Some participants who supported a rate cut said the decision was very close, or that they could have supported holding rates steady,” the document said.

Odds of a January Rate Cut Are Falling
Following the release of the minutes, the odds of a rate cut in January fell to just 15%.
Stephen Stanley, chief U.S. economist at Santander US Capital Markets, noted:

“The near-even split in the vote underscores Jerome Powell’s continuing influence as Fed Chair.”
The Fed now finds itself at a delicate crossroads—seeking the right balance between supporting growth and controlling persistent inflation.

#Fed , #JeromePowell , #interestrates , #fomc , #TrumpTariffs

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The U.S. initial jobless claims have come in lower than expectations, signaling a rebound in the job market after last year’s weak figures. This comes amid expectations that the Fed will hold rates steady at the January #FOMC meeting.
U.S. Initial Jobless Claims Come In Below Expectations
Department of Labor data show that the adjusted initial claims for the week ending December 10 were 198,000, a decrease of 9,000 from the previous week’s revised level. The data also came in below expectations of 215,000, signaling a rebound in the labor market, with holiday-season volatility well over. This figure also marks the lowest level since November.
As CoinGape reported, the jobless claims for the week ending January 3 came in below expectations, at 208,000. The Department of Labor revised this figure to 207,00, further supporting the case of a rebound in the labor market.
This development comes as the Fed is likely to hold rates steady at the January FOMC meeting after making three rate cuts last year as insurance against further weakness in the labor market. CME FedWatch data shows there is currently a 95% chance the Fed leaves rates unchanged. Meanwhile, there is only a 5% chance they lower rates by 25 basis points (bps).
Notably, the PPI inflation data, which dropped yesterday, also strengthened the case for the Fed to hold rates steady, just like the initial jobless claims. The inflation data came in at 3%, suggesting that inflation in the country may be trending higher. Some Fed officials have continued to raise concerns that inflation remains above their 2% target and could rise further due to the Trump tariffs.
Fed’s Goolsbee Comments On The Economy
In a CNBC interview, Chicago Fed President Austan Goolsbee said he is not surprised by the low jobless claims figures. He further remarked that the Fed’s most important task is to bring inflation back to the 2% target.
The Fed president also mentioned that interest rates can still go down a fair amount, but that they need firm evidence that inflation is trending downwards. Goolsbee also expects to see Fed rate cuts this year, but needs data to affirm the outlook.
Meanwhile, he also touched on the Powell probe, noting that infringing on central bank independence leads to high inflation. U.S. President Donald Trump has continued to pressure the Fed to make larger cuts, aiming to bring interest rates down to at least 1%.