New York Fed President John Williams said Friday there is room for “further adjustment in the near term” to interest rates – sparking traders to step up their bets on a quarter-point cut at the Fed’s December meeting.

Williams argued labor market weakness still poses a bigger threat than inflation, leaving the door open for a quarter-point cut, even as analysts were split on next month’s decision following mixed jobs data.

“I view monetary policy as being modestly restrictive, although somewhat less so than before our recent actions,” Williams said during a speech at a conference in Santiago, Chile.

“Therefore, I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral, thereby mai

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