Top Fed Official Increases Likelihood of a December Rate Cut

John C. Williams, president of the Federal Reserve Bank of New York, told reporters that the central bank still has “room to lower borrowing costs in the near term.”

The comment arrives as policymakers continue to weigh the balance between curbing inflation and supporting a slowing economy. By hinting that a rate reduction could happen sooner rather than later, Williams has raised market expectations that a cut may be on the table as early as December.

Analysts point to recent data showing a modest easing in price pressures and a gradual cooling of the labor market, both of which could give the Fed the flexibility to act. If a December cut materializes, it would mark the first reduction in rates since the tightening cycle began in 2022.