Fed Officials Shake Markets With Rate Cut Comments
- There was some confusion yesterday when markets interpreted a speech by Federal Reserve Bank of New York President John Williams in which he said central banks should move quickly when they see signs of trouble as referring to upcoming policy actions.
- A New York Fed spokeswoman later clarified that Williams’s prepared remarks were “an academic speech on 20 years of research” rather than a short-term signal.
- Whatever Williams meant to say, there is no getting away from market expectations of a cut at the next meeting -- it’s just the magnitude that’s still under debate.
- Meanwhile, the European Central Bank is expected to signal further easing at its meeting next week.