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Fed's Williams says if inflation ebbs, further reductions in policy rate will eventually be warranted

Fed's Williams suggests that if inflation continues to decline, further policy rate reductions may be warranted.

Newsquawk StaffPublished On the live feed at — 9 more headlines followed before this page went public
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Newsquawk European Market Wrap - 3rd March 2026

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Fed's Williams says if inflation ebbs, further reductions in policy rate will eventually be warranted

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Policy

  • Eventual rate cuts are aimed at keeping policy from being too restrictive.
  • Rate policy stance is currently 'well positioned'

Jobs

  • Economy on solid footing, and the job market is stabilizing.
  • Expects the unemployment rate to edge down this year and next.

Inflation

  • Recent data on inflation has been reassuring.
  • Tariffs are a key driver of inflation but that pressure should wane this year.
  • So far there is no major second round impact from tariffs.
  • Expects inflation to ease to 2.5% this year and 2% in 2027.

Growth

  • Sees 2.5% GDP growth in 2026.
Context
This dovish tone implies a willingness to support growth if inflation remains under control, which could influence market expectations for future rate paths. Overall, the comments indicate a balanced approach, potentially easing pressure on fixed income and impacting USD dynamics if traders perceive a more accommodative Fed stance.
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