John Williams, president and chief executive officer of the Federal Reserve Bank of New York, during the Market Forum: FX in Focus event in New York, on Thursday, Sept. 7, 2023.

Victor J. Blue | Bloomberg | Getty Images

New York Federal Reserve President John Williams said Friday rate cuts are not a topic of discussion at the moment for the central bank.

“We aren’t really talking about rate cuts right now,” he said on CNBC’s “Squawk Box.” “We’re very focused on the question in front of us, which as chair Powell said… is, have we gotten monetary policy to sufficiently restrictive stance in order to ensure the inflation comes back down to 2%? That’s the question in front of us.”

The Fed on Wednesday held its key interest rate steady for the third straight time and set the table for multiple cuts to come in 2024 and beyond.

Projections released by the Fed showed the central bank would slash rates to a median 4.6% by the end of 2024, which would be three quarter-point reductions from the current targeted range between 5.25%-5.5%. 

Williams said that the Fed will remain data dependent, and if the trend of easing inflation were to reverse, it’s ready to tighten policy again.

“It is looking like we are at or near that in terms of sufficiently restrictive, but things can change,” Williams said. “One thing we’ve learned even over the past year is that the data can move and in surprising ways, we need to be ready to move to tighten the policy further, if the progress of inflation were to stall or reverse.”

The Fed projected that its favorite inflation gauge — the core personal consumption expenditures price index — will fall to 2.4% in 2024, and further decline to 2.2% by 2025 and finally reach its 2% target in 2026. The gauge rose 3.5% in October on a year-over-year basis.

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Original: Finance: Fed’s John Williams says the central bank isn’t ‘really talking about rate cuts right now’