Fed's Williams Warns Inflation Must Come Down to Meet 2028 Goal
New York Fed Chair John Williams expressed confidence that inflation will ease gradually, but emphasized that the central bank is prepared to take action if necessary. Speaking to Reuters, Williams stated that energy prices and tariffs may have reached their peak, allowing disinflationary forces to continue acting.
Williams noted that his personal forecast is for inflation to come down in the second half of this year and further next year. However, he acknowledged that if inflation does not trend down to the Fed's 2% goal, it would be appropriate to act to bring it back on track.
The Federal Reserve left interest rates unchanged, but three members of the Federal Open Market Committee dissented, calling for a hike. Cleveland Fed's Beth Hammack and Minneapolis counterpart Neel Kashkari argued that action is needed now to speed up the return of PCE inflation to 2%.