• John Williams is open to a Fed rate cut in September.
  • He sees the job market as strong with a 4.2% unemployment rate.
  • An 88.2% chance of a 25 basis point cut is expected.

John Williams, the head of the New York Federal Reserve, just said he’s okay with cutting interest rates at the Fed’s September meeting.

He was on CNBC talking about how, if inflation keeps dropping and the economy stays on track, lowering rates could work. This comes right after Fed Chair Jerome Powell dropped a hint at last week’s Jackson Hole conference that a rate cut might be coming soon.

Watching the Economy Closely

Williams mentioned that the current rates are a bit tight, so there’s space to cut them and still keep things under control. He said they’ll look at the latest numbers on inflation and jobs to figure out what’s best.

Some people think the job market’s getting shaky, but Williams isn’t convinced, pointing out the unemployment rate’s still at a solid 4.2%. He doesn’t think it’s right to panic just because last month’s job report was weaker than expected. 

As one of the voters on the Federal Open Market Committee. Williams could have a big say at the September 16-17 meeting. Powell talked about growing job risks, but Williams seems less worried. According to CME FedWatch, there’s an 88.2% chance of a 25 basis point cut next month. 

Meanwhile, President Donald Trump’s pushing hard for a cut and even tried to fire Fed Governor Lisa Cook. Who’s fighting it, saying he’s got no legal basis. Trump’s also trying to fast track Stephen Miran to replace Adriana Kugler on the Fed Board before the meeting. It’s a tense time as everyone waits to see what the Fed will do next.