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US Fed must be 'vigilant' to support growth: Fed member

2 min

New York (AFP)

New York Federal Reserve Bank chief John Williams said Wednesday he is ready to take action to support the American economy, which faces mounting risks and uncertainty.

The remarks by the influential Fed member, who holds the vice chair of the central bank's monetary policy committee, should comfort investors who expect the Fed to cut interest rates again in two weeks.

In a speech, Williams said that while the American economy appeared to be on solid footing, weak exports and manufacturing, slower global growth, falling business investment, persistently low inflation and churning trade wars all created notable risk and uncertainty.

"I am carefully monitoring this nuanced picture and remain vigilant to act as appropriate to support continuing growth, a strong labor market, and a sustained return to two percent inflation," Williams said, according to his prepared remarks.

Williams' remarks came a day after a more hawkish address from Boston Fed President Eric Rosengren, who said current economic trends suggest a rate cut is not likely to be justified.

Rosengren was one of two Fed members who were outvoted last month when the Federal Open Market Committee, the body vice-chaired by Williams, decided to cut interest rates for the first time in a decade.

Investors overwhelmingly expect the Fed to cut rates at its September 17-18 meeting, with a minority even betting policymakers could reduce rates by 50 basis points.

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