Inflation is coming down in a sustainable way towards the Federal Reserve's 2% target and it is now time to cut interest rates, New York Fed President John Williams said, on Friday.
With the economy in balance and inflation tracking lower "it is now appropriate to dial down the degree of restrictiveness in the stance of policy by reducing the target range for the federal funds rate," Williams said, in a speech prepared for delivery to the Council on Foreign Relations.
Williams prepared remarks came before the Labor Department released the August jobs data Friday morning.
Late last month, Fed Chair Jerome Powell said that "the time has come for policy to adjust."
Williams made no mention in his prepared remarks about the potential size of the rate cut.
The Fed has kept its benchmark rate in a range of 5.25%-5.5% for the past year.
Regarding the future course of easing, Williams said rates can be moved "to a more neutral setting over time" and that the moves would depend on the evolution of the data, the outlook and the risks to the forecast.
Williams said the process of shrinking the Fed's balance sheet is going smoothly and there is room for this process to continue.