Fed's Williams, echoing Powell, says policy is in 'a good place'

FILE PHOTO: John Williams, Chief Executive Officer of the Federal Reserve Bank of New York, speaks at an event in New York, U.S., November 6, 2019. REUTERS/Carlo Allegri/File Photo

(Reuters) - Using words that have become a mantra for the U.S. central bank in its bid to ensure the longest-ever economic expansion stays on track, an influential Federal Reserve policymaker signaled on Thursday that barring a sudden downturn, the Fed is unlikely to cut interest rates further.

“The economy is in a good place, and monetary policy is as well,” New York Fed President John Williams said at the start of a conference on Asian economic policy at the San Francisco Fed. Fed Chair Jerome Powell used those same phrases to describe the economy and the Fed’s setting of interest rates after the central bank cut rates last month for the third time this year.

The reductions in borrowing costs, which have pushed the Fed’s overnight lending rate target to between 1.50% and 1.75%, were aimed at countering headwinds like slowing global growth and uncertainty over trade policy and Britain’s exit from the European Union, even as U.S. households have continued to bolster growth at home with their spending, Williams said.

But he added that no economy can insulate itself from the world. Slowing growth abroad, trade tensions, and geopolitical risks pose threats to U.S. growth.

Williams said he expects U.S. economic growth to continue at a moderate pace, with GDP expanding about 2% this year, and he forecast the labor market to remain strong and for inflation to move back up to the Fed’s 2% target.

In words that again echoed Powell’s, underscoring how strongly the Fed wants to get the message across, Williams said, “If there were a material change to this outlook, we would adjust monetary policy in support of our goals of maximum employment and price stability,”

Reporting by Ann Saphir; Editing by Paul Simao