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The US central bank's bold September interest rate cut is not necessarily an indication of how it will act in the coming months, a Federal Reserve official said in an interview published Tuesday.
"Given that we were very careful in keeping the stance of policy restrictive, it made sense to do that recalibration," New York Fed president John Williams told the Financial Times, referring to the bank's recent half percentage point cut.
But he added: "I don't see that as the rule of how we act in the future."
He stressed that policymakers will make subsequent rate decisions based on data received between now and their next meeting.
"Data dependence has served us extremely well," Williams said, adding that he strongly backed September's reduction.
In mid-September, the Fed lowered interest rates for the first time since 2020 as inflation cooled, heading towards its two percent target.
Fed Chair Jerome Powell has also signaled that further rate cuts are in the pipeline if there are no major surprises.
In the interview published Tuesday, Williams said: "I don't want to see the economy weaken. I want to maintain the strength that we see in the economy and in the labor market."
He noted that recent policy adjustment "sets us up really nicely to achieve both of those goals -- inflation moving back to two per cent and still the economy growing."
He added that the United States has some way to go before fully returning inflation to two percent on a sustained basis.
For now, goods inflation has gone back to levels seen before the pandemic, even though housing inflation has been "more sluggish to come down," he said.
But he added that all current indicators suggest that this particular kind of inflation is headed lower.