New York Federal Reserve Bank president John Williams said in a CNBC interview that the central bank isn't really talking about rate cuts right now. He added that inflation and the economy are still uncertain, but base cases are looking pretty good.
The official also noted that the policymakers are focused on whether interest rates are in the right place. "It's looking like we're at or near sufficiently restrictive but things can change," he warned, adding that the Fed needs to be ready to tighten further if progress on inflation were to stall.
Williams also pointed out that the market reaction to all news events has been larger than normal. He noted that the FOMC's view is a gradual removal of policy easing over the next three years, while the market reaction has gone further than these predictions.
In Williams' opinion, the policy restraints should be dialled back slowly over the next three years and it is premature to be even thinking about March cuts.