(Bloomberg) -- Federal Reserve Bank of New York President John Williams (NYSE:WMB) said weaker U.S. economic data and ongoing global risks are weighing on central bank decision-making at the moment.
“Uncertainty, both at home and abroad, is playing an important role in my thinking about the economic outlook and monetary policy,” Williams (NYSE:WMB) said Wednesday in remarks prepared for a speech in New York.
Williams (NYSE:WMB) and his colleagues on the policy-setting Federal Open Market Committee cut interest rates by a quarter percentage point when they last met in July, citing slowing global growth, trade policy uncertainty and muted inflation. They are expected to deliver another reduction when they next meet Sept. 17-18, according to prices of federal funds futures contracts.
The New York Fed chief pointed to deterioration in U.S. manufacturing a day after a closely-watched report from the Institute for Supply Management suggested the sector had contracted in August, for the first time in three years.
“Robust consumer spending is balanced by signs of slowing business investment. We’ve also seen a decline in exports and weakening manufacturing data, reflecting slowing global growth and uncertainty related to trade and geopolitical risks,” Williams (NYSE:WMB) said. “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 2% inflation.”
Williams (NYSE:WMB), as vice chair of the FOMC, is a key policy maker on the 17-strong committee of U.S. central bankers, who are split on the need for more easing, according to recent public statements. He pointed to the effects of U.S. President Donald Trump’s trade war with China, indicating it has cast a chill over the business community. Trump has repeatedly called for the Fed to cut rates, breaking with a quarter-century of tradition in which the president typically refrained from commenting on Fed policy in public.
“Concerns around trade policy with China are adding to an uncertain picture. My contacts in the business community have said this is making them more cautious about investment. The effects of this angst are already showing up in the investment numbers,” Williams (NYSE:WMB) said.
“Persistently low inflation, heightened uncertainty, and global cross-currents make this a particularly challenging time for monetary policy, and my laser focus is on doing the best we can to support a strong economy and achieve our 2% goal.”
