Fed's Williams Warns of Inflation Risks Amid Strong Demand for AI

Federal Reserve Bank of New York President John Williams said that more work is needed to bring down US inflation, citing high energy prices and strong demand driven by investment in artificial intelligence. He stated that market expectations for another interest-rate hike by the end of the year are a 'reasonable way of thinking about it,' but emphasized that this will depend on future developments.

Williams pointed out that the US economy has shown 'remarkable resilience despite significant shocks' and that the labor market remains 'solid.' However, he highlighted lingering inflation risks from the ongoing US-Iran war and strong demand for AI.