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Fed clarifies Williams speech as the market signaled a price cut



John C. Williams, President and CEO of the Federal Reserve Bank of New York, speaks to the Economic Club of New York on March 6, 2019.

Lucas Jackson | Reuters

When New York Federal Reserve President John Williams said central bankers need to "act quickly" as economic growth slows down, a spokesman said he withdrew from research, not hinting at what might happen at this month's Federal Open Market Committee. fashion.

"This was an academic talk of 20 years of research. It was not about possible political action at the forthcoming FOMC meeting," a New York Federal Reserve spokesman told CNBC.

Earlier, Williams sent a speech at the annual meeting of the Central Bank Research Association where he said: "It is better to take preventive measures than to wait for disaster to develop."

His comments come as Wall Street expects the US central bank to cut its benchmark price in July 30-31

meeting.

After Williams & # 39; s previous remarks, market expectations jumped for a 50 basis point cut to approx. 59%, according to CME's Fedwatch tool. Prior to his speech, predictions for a half-stroke had hovered between 20% and 30%.

Later, Fed leader Richard Clarida said on Fox Business News that cutting interest rates is a good strategy quickly. Market expectations for a half-point decline increased even higher to around 69%.

But after the New York Fed spokesman managed the Williams comments, expectations of a 50 basis point cut fell to around 50% around 7 pm Eastern time.

The Fed currently points overnight between 2.25% and 2.5% – above zero, but still well below normal levels prevalent during recent economic expansions.

– CNBC's Fred Imbert and Patti Domm contributed to this report.


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