Two Federal Reserve officials, including New York Fed chief John Williams, suggested that policymakers may not be ready to lower interest rates before September as they confront a murky economic outlook. “It’s not going to be that in June we’re going to understand what’s happening here, or in July,” Williams said toay at a conference organized by the Mortgage Bankers Association. “It’s going to be a process of collecting data, getting a better picture, and watching things as they develop.”
The Fed’s next three meetings are in June, July, and September. Investors now see less than a 10 percent chance of a rate cut when policymakers next meet, on June 17 and 18 in Washington. Based on pricing in fed funds futures, investors expect two quarter-point reductions by year’s end, down from the four predicted at the end of April.
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Atlanta Fed President Raphael Bostic struck a similar tone in an earlier interview today, signaling an unwillingness to move rates for some time. “The economy is in a lot of flux, policy is in flux, there’s a lot of uncertainty,” Bostic told CNBC. “I think we’ll have to wait three to six months to start to see where this settles out.”
Earlier this month, Fed officials held interest rates steady, expressing heightened uncertainty largely due to tariffs. Policymakers also see risks of both higher unemployment and inflation.
Williams stressed that uncertainty is hindering not only policymakers, but also businesses and households struggling to predict how tariffs and other policies from the Trump administration will reshape the U.S. economy. Like many of his colleagues, he said the Fed can take its time in assessing new data. While he acknowledged inflation has been falling and the economy is close to full employment, he’s monitoring delinquencies and the appetite for consumer spending. He also described the Fed’s current policy setting as “slightly restrictive” and in a good place.
Bostic expressed particular concern over inflation and the public’s expectations for future price increases. “Given the trajectory of our two mandates, our two charges, I worry a lot about the inflation side, and mainly because we’re seeing expectations move in a troublesome way,” Bostic said.
Fed vice chair Philip Jefferson also emphasized a wait-and-see approach at the Atlanta Fed’s 2025 Financial Markets Conference today. He said it’s important for the Fed to make sure any potential increase in prices doesn’t evolve into a sustained rise in inflation. “Given the level of uncertainty that we’re facing right now, I believe that it is appropriate that we wait and see how the policies evolve over time and their impact,” Jefferson said, adding that monetary policy is in a “very good place.”
Minneapolis Fed president Neel Kashkari—also speaking today—noted that the U.S. economy was on solid footing in the early part of this year, and that the central bank has made a lot of progress on lowering inflation. He said tariffs, however, have thrown policymakers a “curve ball,” leaving policymakers on hold for now. “There’s a lot of uncertainty that we’re trying to navigate,” Kashkari said. “It’s really just wait and see until we get more information.”
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