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Fed's Williams Signals More Rate Cuts Depend on Inflation
New York Fed president says further cuts may be needed if inflation slows after tariff impact fades.
Mar. 3, 2026 at 2:55pm
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Federal Reserve Bank of New York President John Williams said additional interest-rate cuts will be warranted if inflation slows further once most of the impact of tariffs has passed. Williams indicated that further reductions in the federal funds rate may be needed to prevent monetary policy from becoming too restrictive if inflation follows his expected path.
Why it matters
The Fed's monetary policy decisions have a significant impact on the broader economy, influencing factors like employment, consumer spending, and business investment. Williams' comments suggest the central bank is closely monitoring inflation trends and may be willing to cut rates further if needed to support the economic recovery.
The details
In prepared remarks, Williams said 'If inflation follows the path I expect, further reductions in the federal funds rate will eventually be warranted to prevent monetary policy from inadvertently becoming more restrictive.' This signals the Fed is open to additional rate cuts if inflation does not pick up as policymakers hope.
- Williams made these remarks on March 3, 2026.
The players
John Williams
President of the Federal Reserve Bank of New York.
What they’re saying
“If inflation follows the path I expect, further reductions in the federal funds rate will eventually be warranted to prevent monetary policy from inadvertently becoming more restrictive.”
— John Williams, President, Federal Reserve Bank of New York
What’s next
The Federal Reserve's next policy meeting is scheduled for March 17-18, 2026, where officials will have the opportunity to further discuss the economic outlook and the potential for additional rate cuts.
The takeaway
The Fed remains vigilant about inflation and is signaling a willingness to cut rates further if needed to support the economic recovery, though the timing and extent of any future cuts will depend on how inflation trends evolve in the coming months.
