Fed’s Williams: Neutral rate is likely still low
John Williams, Chief Executive Officer of the Federal Reserve Bank of New York, speaks at an event in New York, U.S., November 6, 2019. REUTERS/Carlo Allegri
By Michael S. Derby
(Reuters) -Federal Reserve Bank of New York President John Williams said Friday that he suspects the “neutral” state of interest rates hasn’t risen much in the wake of the coronavirus pandemic.
It’s likely that based on the most recent data “the neutral rate is still quite low,” Williams said in an appearance in London, referring to a level where interest rates neither boost nor slow the economy.
Williams did not comment on the monetary policy or economic outlook in his appearance, but he reiterated that achieving price stability is a core responsibility of the central bank. He also said that politics do not factor into the central bank’s decision-making process.
In recent comments Williams has said he expects the Fed to lower its interest rate target this year but he has not signaled when he expects that to happen.
