After plunging earlier this week, December rate-cut odds were back up above 70% on Friday.
Traders see a 70.9% chance of Dec. 10 rate cut, which is up from 39.1% on Thursday. Such odds were down to about 30% earlier in the week.
New York Federal Reserve President John Williams was the latest central bank official to weigh in on whether or not to pause rate cuts, during prepared remarks delivered at the Central Bank of Chile Centennial Conference. While he said it was “imperative” to get inflation to the central bank’s longer-run goal of 2% on “sustained basis” he added that it is “equally important to do so without creating undue risks to our maximum employment goal.”
Williams views monetary policy as “being modestly restrictive, although somewhat less so than before our recent actions.”
“Therefore, I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral, thereby maintaining the balance between the achievement of our two goals,” Williams said.
The comments seemed to give the stock market a boost. S&P 500 futures were up 0.4% after falling earlier in the morning. Nasdaq 100 futures were up 0.3%. Dow futures were up 0.6%.
Through the January meeting, odds of two quarter-point cuts were up to 26.7% from 19.9%. Odds of just one quarter-point cut through January were at 55.2% from 50.2% on Thursday.
