Economists, now pondering the size of the rate cut, perceived Williams' words as an indication of an aggressive policy move - one that probably lowers the rate by 50 basis points.
"Williams' remarks put probabilities of multiple rate cuts higher after strong economic indicators had put doubts on the number of rate reductions this year and how deep the cut will be", said OANDA senior market analyst Alfonso Esparza.
Financial markets quickly reacted, with futures at one point pricing in nearly 70 percent chance of a 50-basis-point cut at the month-end meeting.
Brent futures prices are edging higher today after a U.S. Navy ship destroyed an Iranian drone in the Strait of Hormuz.
Global stocks rose on Friday after a top Federal Reserve official cemented expectations of a USA interest rate cut later this month, fuelling appetite for riskier assets and keeping a cap on the dollar.More news: Oilers trade Lucic to Flames for Neal
The dollar edged up with Treasury yields, giving back some earlier losses, after the New York Federal Reserve said its President, John Williams, wasn't sending a specific policy signal with earlier commentary that fueled bets on a half-point interest rate cut this month.
US stock futures traded higher in early pre-market trade, ahead of earnings from American Express Company (NYSE: AXP) and ManpowerGroup Inc.
Shortly following Williams' speech, spokesperson for the New York Federal Reserve tried to quell speculations by clarifying in a statement that the official was delivering "an academic speech on 20 years of research".
"If the Fed cut rates, that could encourage fresh investments in emerging currencies and other risk assets", said Bart Wakabayashi, State Street Bank's representative in Japan.
In Europe, the automotive, chemical and food-and-beverage companies were among gainers on the pan-continental Stoxx Europe 600 index, which was mostly flat following a two-day losing streak.More news: Fear the Walking Dead renewed from season 6
Wall Street shares moved higher overnight as comments from New York Federal Reserve President John Williams helped cement expectations for an interest rate cut this month.
As of writing, Japan's Nikkei is up 1.65% or 365 points and the Shanghai Composite is adding 1.12% or 32 points.
Recent comments from Fed officials seemed to confirm the signal that policymakers are prepared to act to sustain U.S. growth in the face of a slowing global economy and persistent trade tensions with China. The 2-year yield was at 1.7908 percent after touching a two-week low of 1.7520 percent.
The euro weakened 0.2% to $1.1261 but remained firmly within its weekly range as traders wait for next week's European Central Bank meeting.
West Texas Intermediate crude advanced 1% to $55.85 a barrel.Gold slid 0.3% to $1,442.27 an ounce.More news: Arsenal Book In Key Laurent Koscielny Meeting