Investors hoping for monetary easing might be facing disappointment. NY Fed President John Williams has just poured cold water on near-term rate cut expectations, offering a bullish assessment of the US economy health in 2026.
🔸 Williams stated that monetary policy has moved from restrictive to near neutral and is currently well positioned to support labor market stability while driving inflation back to the 2% target.
🔸 He emphasized the importance of balancing risks While the risk of inflation rebounding has decreased, downside risks to the labor market have increased in recent months.
🔸 Regarding economic outlook, Williams forecasts GDP growth of 2.5% - 2.75% this year, with unemployment remaining stable. Inflation is expected to peak in the first half of the year and return to the 2% target by 2027.
With the NY Fed maintaining a hawkish stance that the economy is healthy and doesn't need immediate life support (rate cuts), will cheap money return in time to fuel a financial market boom in the first quarter?
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