Fed's Williams: Recent rate cut aimed at bolstering job market

By Michael S. Derby

(Reuters) -Federal Reserve Bank of New York President John Williams said on Monday that emerging signs of weakness in the labor market drove his support for cutting interest rates at the most recent central bank meeting.

"It made sense to move interest rates down a little bit" and "to take a little bit of the restrictiveness out of there," to help ensure ongoing health in the job market while still keeping some downward pressure on above-target inflation levels, Williams said during an appearance in Rochester, New York.?

Williams' comments on Monday were his first public remarks since the central bank's rate-setting Federal Open Market Committee mid-month gathering that met market expectations, with officials trimming their overnight target rate range by a quarter percentage point to between 4% and 4.25%. The Fed justified its rate cut on rising risks to the job market, even as inflation remains above target.?

At the Fed meeting, officials penciled in more rate cuts into year-end. In his appearance, Williams did not say what he wants monetary policy to do going forward, saying the FOMC will make decisions on a meeting-by-meeting basis.?

Williams also noted the Fed has unresolved business in dealing with high price pressures. "We still have a ways to go to get to that 2% goal. We've moved a long ways towards that," but the central bank also does not want to do "undue harm" to the Fed's other goal of keeping the job market as strong as it can be.?

"We have a balancing act here" between getting inflation down and supporting a job market that "has been gradually softening over the past year." When it comes to weakening job creation, "I don't want to see that go too far."

At the same time, Williams noted that some of the things that were creating worry about persistently high inflation have waned. "The tariff effects have been smaller than most people thought, and there doesn't seem to be any signs of inflationary pressures building."?

(Reporting by Michael S. Derby, Editing by Franklin Paul and Andrea Ricci)