Federal Reserve Watch for Nov. 21: Williams Says Policy 'Modestly Restrictive,' Room to Lower Rates

02:59 PM EST, 11/21/2025 (MT Newswires) -- New York Fed President John Williams (voter) said that monetary policy is "modestly restrictive" and that he sees room for a further downward adjustment to the federal funds rate "in the near term" to move it closer to the rate of neutral.

Fed Governor Stephen Miran (voter) said he still favors a 50-basis point reduction and the December FOMC meeting but added that he would support a 25-basis point reduction if it meant getting a smaller rate cut versus none at all.

Recent comments of note:

(Nov. 20) Philadelphia Fed President Anna Paulson (nonvoter) said that monetary policy needs to act cautiously as it lowers rate close to the neutral level where policy changes from being restrictive to being stimulative, noting that inflation remains above the Fed's 2% target.

(Nov. 20) Cleveland Fed President Beth Hammack (nonvoter) said that there are risks to lowering the federal funds rate further, particularly if it keeps inflation elevated and encourages risk taking. Hammack said that labor market softening has not been as severe as expected and that the FOMC needs to keep policy "somewhat restrictive" to lower inflation.

(Nov. 19) The minutes of the Oct. 28-29 FOMC meeting showed a divisive discussion among the members regarding the future path of monetary policy, with many suggesting that while further rate reductions may be needed, a cut at the December FOMC meeting may not be appropriate. While many participants supported the rate cut at October meeting, some said that could have supported maintaining the target rate and several were against the rate reduction due to concerns that inflation progress has stalled. Comments from officials since the meeting have echoed those divisions.

(Nov. 18) Richmond Fed President Tom Barkin (nonvoter) said that there are signs that the employment picture is weaker than some data would suggest and that inflation is not likely to increase considerably but would not comment on the appropriate action at the December FOMC meeting due to the lack of government data that would normally provide some guidance.

(Nov. 17) Fed Governor Christopher Waller (voter) called for another 25-basis point reduction in the federal funds rate at the December meeting due to evidence of a weakening labor market, saying that he does not expect inflation to reaccelerate.

(Nov. 17) Fed Vice Chair Philip Jefferson (voter) suggested that the FOMC should move slowly with considering further rate reductions as the target moves closer to neutral but conceded that risks to employment have increased.

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