In a recent statement, New York Fed Bank President John Williams acknowledged the Federal Reserve’s ongoing efforts to bring inflation back to its 2% target. Although progress has been made, the goal is yet to be achieved.

What Happened: Williams recognized the Federal Reserve’s progress in controlling inflation. However, he stated that the 2% target is still a distance away, Reuters reported on Friday.

During an event at the Reserve Bank of India in Mumbai, Williams said, “We have seen significant progress in bringing it down…But we still have a way to go to reach our 2 percent target on a sustained basis. We are committed to getting the job done.”

As per the U.S. central bank’s preferred measure, inflation in May was at a 2.6% annual rate, a decrease from the 7.1% peak during the COVID-19 pandemic. The Fed has maintained its benchmark interest rate in the 5.25%-5.50% range since last July to help slow price increases.

See Also: US Services Sector Activity Experiences Largest Contraction In Over 4 Years: Gold Rallies, Dollar Tumbles

The minutes from the Fed’s June 11-12 meeting, published on Wednesday, revealed a growing confidence among policymakers that price pressures are easing. However, Williams emphasized that the Fed’s decisions will always be guided by the totality of economic data it receives, and nothing is taken for granted.

“Uncertainty will continue to be the defining characteristic of the monetary policy landscape for the foreseeable future,” Williams added.

Why It Matters: The Federal Reserve’s cautious approach to interest rate cuts has been evident in recent times. As per the minutes from June’s Federal Open Market Committee (FOMC) meeting, policymakers were not eager to cut interest rates until additional data confirmed that inflation is moving sustainably toward the committee’s 2% target.

Market expectations for rate cuts increased following June's lower-than-expected services sector activity. The odds of a Fed rate cut in September rose from 65% to 72%.

Earlier, Morgan Stanley predicted that the U.S. Federal Reserve and the European Central Bank (ECB) are likely to cut interest rates in September, following a deceleration in inflation in both the U.S. and the eurozone.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari