Overview
- John Williams said he sees room for a "further adjustment in the near term" to bring policy closer to neutral, citing softer labor conditions and somewhat reduced inflation risks.
- CME FedWatch probabilities for a 25 bp cut in December jumped to roughly 70%–75%, up from about 35%–40% the day before his remarks.
- Market reaction was positive, with major stock indexes rebounding and bitcoin rising as investors repriced the likelihood of near‑term easing.
- Senior policymakers remain split, with officials like Susan Collins and Lorie Logan arguing for holding rates unless inflation clearly falls faster or the labor market cools more rapidly, while others have voiced support for another cut.
- The debate is colored by limited official data after a shutdown and a mixed September jobs report showing 119,000 payrolls added and unemployment at 4.4%, setting up a closely contested Dec. 9–10 meeting with potential dissents.