WASHINGTON (BLOOMBERG) – Two senior Federal Reserve officials stressed the need to act quickly if the US economy looked likely to stumble, reinforcing bets the central bank could cut interest rates by as much as half a percentage point later this month.

Fed Vice chairman Richard Clarida and New York Fed chief John Williams buoyed US stocks with their dovish remarks Thursday afternoon (July 18), in some of the final comments from central bankers before they enter their blackout period ahead of a July 30-31 policy meeting.

US money markets priced in 41 basis points of easing in July after the two men spoke. Traders later wound that back to 35 basis points and the dollar rose after a New York Fed spokeswoman said that Williams’s comments had been in the context of an academic speech and were not about potential upcoming policy actions. Clarida was discussing the current economic outlook in a television interview.

“You don’t need to wait until things get so bad to have a dramatic series of rate cuts,” Clarida told Fox Business Network, citing economic research. “We need to make a decision based on where we think the economy may be heading and, importantly, where the risks to the economy are lined up.”

His remarks line up with testimony last week by Fed chairman Jerome Powell, and comments a bit earlier in the day from Williams, that have cemented expectations for a rate cut. Investors, weighing their words, increased bets Thursday that the Fed will move by a half point at the gathering.

While the US economy is “in a good place,” Clarida said recent global economic data have been softer than expected. “We’ve had mixed data, but I do think the global data has been disappointing on the downside,” he said. “Disinflationary pressures, if anything, are more intense than I thought six weeks ago.”

Clarida, the No 2 official at the Fed, spoke not long after Williams appeared in New York saying that: “When you only have so much stimulus at your disposal, it pays to act quickly to lower rates at the first sign of economic distress.”

A New York Fed spokeswoman later clarified that Williams’s prepared remarks were “an academic speech on 20 years of research. It was not about potential policy actions at the upcoming FOMC meeting.”

Williams, answering audience questions after his speech, also voiced concern about low inflation expectations, calling it “somewhat worrisome given the otherwise-strong US economy.”

“My concern is that inflation expectations can get anchored too low, and we may be seeing that, have seen that in other countries,” he said.

Not all Fed officials are on board with even a quarter-point decrease.

Atlanta Fed President Raphael Bostic, who has previously expressed skepticism of the need to lower rates, underlined that view earlier Thursday in Tennessee. He rejected the notion that yields in Treasury bonds provide a warning that should cause the Fed to cut.

“It’s important for us to stay grounded in the real economy,” said Bostic, who doesn’t vote on policy this year. Clarida and Williams are permanent voters.

Asked if the Fed can decide to leave rates unchanged this month, Clarida replied, “We go into every meeting looking at the range of options available to us. I think our messaging has been quite clear that we want to put in place the appropriate policies to keep the economy in a good place.”