New York Fed President sees inflation declining to 3.25% by year-end but maintains 2% target for 2028 amid solid growth.
Federal Reserve policymakers view the current monetary stance as appropriately restrictive to bring inflation back to the 2% target, New York Fed President John Williams said. Inflation remains “unquestionably too high” at about 4%, though it is expected to edge lower in coming quarters.
Williams projected inflation to decline to around 3.25% by year-end, continuing toward the Fed’s goal in 2027 and reaching 2% in 2028. Real GDP growth is forecast at 2%-2.25% over the next two years, with unemployment gradually falling to 4% by 2028.
While risks from Middle East supply disruptions persist, the U.S. economy has absorbed recent shocks well, with a resilient labor market. Markets are pricing in potential rate cuts, though Williams did not push back on current policy expectations.