NEW YORK / LONDON (IT BOLTWISE) – New York Fed President John Williams’ recent comments have sent financial markets into turmoil. His support for an early rate cut has doubled the likelihood of such an action, leading to a rise in stock prices and a recovery in the price of Bitcoin. These developments raise questions about the future direction of U.S. monetary policy.
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Recent comments from New York Fed President John Williams have sent financial markets into flux. Williams expressed his full support for the central bank’s recent rate cuts and advocated for further reductions in the near future. This announcement doubled the chances of a rate cut next month, leading to a rise in stock prices and a recovery in the price of Bitcoin.
In his speech in Chile, Williams emphasized the need to bring inflation back to the long-term target of 2 percent without jeopardizing maximum employment. He sees scope to further adjust the target range for the key interest rate to bring monetary policy closer to neutral and maintain the balance between the Fed’s two objectives.
The market reaction was immediate. Bitcoin price recovered from losses and rose from under $81,000 to nearly $84,000. At the same time, the SPDR S&P 500 ETF rose 0.5 percent after previously falling 0.5 percent. These moves reflect increased expectations that the US Federal Reserve could soon ease its interest rate policy.
The likelihood of a rate cut in December also rose after labor market data showed the unemployment rate rose to 4.4 percent in September, the highest level since October 2021. These developments raise questions about the future direction of U.S. monetary policy and how it could affect global markets.
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