New York Fed President signals confidence in disinflation but warns of potential rate increases if inflation stalls above target.
Federal Reserve Bank of New York President John Williams expects inflation to ease in the second half of 2024 and continue declining next year, citing fading energy prices and trade tariffs as key factors. He projects core inflation will align with the Fed’s 2% target by 2028 if current trends persist.
Williams noted current monetary policy is “well positioned” to achieve the inflation goal but emphasized the Fed will act if data deviates. Inflation remains above 2%, and he stressed the need for sustained progress toward the target.
The official reiterated that rate hikes remain an option if inflation fails to moderate, underscoring the Fed’s data-dependent approach. Markets are closely watching upcoming inflation prints for signs of cooling or persistence.