Fed's Williams expects inflation to ease, says Fed will act if it doesn't
Williams said the policy rate is well positioned, but the central bank will act if core inflation does not keep moving toward 2%.
- New York President John Williams said on Monday that inflation should ease in the second half of this year, though the central bank will raise rates if progress toward its 2% target stalls.
- Last week, the Federal Open Market Committee left interest rates unchanged at 3.5% to 3.75%, though three Fed officials dissented to argue for an immediate rate hike to address persistent inflation.
- Cleveland Fed President Beth Hammack and Minneapolis counterpart Neel Kashkari joined Dallas Fed Lorie Logan in calling for action, citing that "inflation has remained stubbornly above 2% for more than five years."
- Inflation rose 3.7% year-over-year in June, while the Fed's preferred gauge, the PCE index, fell 0.1% in the same month, offering policymakers some respite from recent price pressures.
- Williams noted that while some inflationary drivers like oil prices may diminish, uncertainty persists regarding the Middle East conflict and volatile sectors that have recently influenced the economy.
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12 Articles
The president of the Federal Reserve (Fed) New York District, John Williams, said he remains optimistic about the fact that inflationary pressures are on a gradual downward path, but stressed that if this does not happen, the United States central bank will not hesitate to respond with interest rate increases to ensure that price pressures return to the target.
The Federal Reserve keeps interest rates stable. US Federal Reserve banker Williams sees the Fed "well set up", but also considers monetary policy measures.
EXCLUSIVE: Fed's Williams expects inflation to ease, says Fed will act if it doesn't
Federal Reserve Bank of New York President John Williams said he remained optimistic that inflation pressures are on track to ease gradually, but if they don’t the U.S. central bank will not hesitate to respond with rate hikes to ensure price pressures return to target.
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