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Financial Bulletin

No.3 of the Federal Reserve: There is no need to further tighten the policy, and interest rates will be cut later this year.

Release Time:2024-03-01

According to media reports, Williams, the No.3 member of the Federal Reserve, the FOMC Permanent Voter Committee and the President of the Federal Reserve of new york, said in the fireside chats at the annual party of new york Citizen Budget Committee on Thursday night local time that there is no need for the Federal Reserve to further tighten its policy, and it may raise interest rates later this year.

As the chairman of the Federal Reserve Bank of new york, Williams has the same permanent voting rights as the members of the Federal Reserve, so he is also regarded as the "third person" of the Federal Reserve.

Williams said:

"I expect that we will cut interest rates later this year."

"We will restore interest rates to a more normal level."

In his speech, Williams admitted that inflation has dropped from the high point in decades, but still stressed that officials hope that inflation will drop to 2% and continue.

Just the day before, Williams also said at the economic briefing organized by the Long Island Association that there is still a long way to go to achieve the 2% inflation target, and he thought that cutting interest rates three times during the year was "a suitable starting point".

In addition, Williams also predicted in his speech at the economic briefing that the year-on-year growth rate of PCE price index will drop by 2% to 2.25% by the end of this year, and will drop to 2% by 2025.

The core PCE in January announced on Thursday rebounded to 0.4% month-on-month, the largest increase in nearly a year, indicating that the road to anti-inflation is still bumpy. Considering the potential upward risk of inflation and the resilience of the labor market, many senior Fed officials, including Powell, have been "hawking" intensively recently.

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