Top Fed officials remained unmoved by the poor July jobs report and remain on the sidelines regarding a rate cut.
2025-08-04 13:02:05
New York Fed President Williams calls job market 'solid'
Several senior Federal Reserve officials said on Friday that the job market remains "solid" even with the poor July jobs report and appeared in no hurry to cut interest rates.
“I would say the state of the labor market is one of ... I think it’s stable, but we do see a slowdown in job growth,” New York Fed President John Williams said Friday.
Cleveland Fed President Philip Hammack and Atlanta Fed President Raphael Bostic also described the job market as solid on Friday, suggesting the Fed would await more information on employment and inflation before deciding to cut interest rates again.
Wall Street bettors raised their odds of a Federal Reserve interest rate cut in mid-September after Friday's July jobs report showed a rapid slowdown in hiring during the late spring and summer.
Williams said he would be “open-minded” about cutting interest rates but said the Fed still needed to ensure inflation was under control. The latest data from the Fed’s favorite inflation gauge showed a rise in June, seemingly in part due to tariffs.
In June, the Fed's preferred core PCE rose 2.8% year-on-year, well above the Fed's 2% target.
Two of Williams' colleagues, Fed Governors Waller and Bowman, dissented in the 9-2 vote to keep the key interest rate steady. They argued that the job market is weaker than other Fed officials believe and said any inflation from the tariffs would be short-lived.
Williams said he believes inflation will gradually fall toward the Fed's 2% target next year, but he prefers to take a wait-and-see approach.
“Inflation will pick up a bit this year because of the impact of tariffs. Then we will see inflation decline next year and reach our 2% objective in 2027,” he said.
Williams also stuck to his view that the labor market is in fairly good shape, with both unemployment and layoffs low.
"We have an economy right now where we have low hiring, low firing," he said.
Williams said the Fed must be satisfied it has achieved its dual statutory goals of low inflation and a healthy job market before cutting rates.
"We have a situation where inflation is above our objective and the labor market remains solid, but there are risks to those and we want to strike a balance," he said.
Several senior Federal Reserve officials said on Friday that the job market remains "solid" even with the poor July jobs report and appeared in no hurry to cut interest rates.
“I would say the state of the labor market is one of ... I think it’s stable, but we do see a slowdown in job growth,” New York Fed President John Williams said Friday.
Cleveland Fed President Philip Hammack and Atlanta Fed President Raphael Bostic also described the job market as solid on Friday, suggesting the Fed would await more information on employment and inflation before deciding to cut interest rates again.
Wall Street bettors raised their odds of a Federal Reserve interest rate cut in mid-September after Friday's July jobs report showed a rapid slowdown in hiring during the late spring and summer.
Williams said he would be “open-minded” about cutting interest rates but said the Fed still needed to ensure inflation was under control. The latest data from the Fed’s favorite inflation gauge showed a rise in June, seemingly in part due to tariffs.
In June, the Fed's preferred core PCE rose 2.8% year-on-year, well above the Fed's 2% target.
Two of Williams' colleagues, Fed Governors Waller and Bowman, dissented in the 9-2 vote to keep the key interest rate steady. They argued that the job market is weaker than other Fed officials believe and said any inflation from the tariffs would be short-lived.
Williams said he believes inflation will gradually fall toward the Fed's 2% target next year, but he prefers to take a wait-and-see approach.
“Inflation will pick up a bit this year because of the impact of tariffs. Then we will see inflation decline next year and reach our 2% objective in 2027,” he said.
Williams also stuck to his view that the labor market is in fairly good shape, with both unemployment and layoffs low.
"We have an economy right now where we have low hiring, low firing," he said.
Williams said the Fed must be satisfied it has achieved its dual statutory goals of low inflation and a healthy job market before cutting rates.
"We have a situation where inflation is above our objective and the labor market remains solid, but there are risks to those and we want to strike a balance," he said.
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