Williams says 75 basis points of cuts in 2025 moved policy closer to neutral from modestly restrictive.
“By reducing the target range for the federal funds rate by a cumulative 75 basis points last year, the FOMC has moved the modestly restrictive stance of monetary policy closer to neutral.”
Williams anticipates moving interest rates toward neutral stance over time if progress continues on dual mandate.
“Looking ahead, if progress on our dual mandate goals continues as in my baseline forecast, I anticipate it will become appropriate to move interest rates toward a more neutral stance over time.”