Williams hints that the Federal Reserve will hold steady: "Monetary policy is in a favorable position"

Deep Tide TechFlow news, April 16 — New York Fed Chair Williams reiterated that monetary policy remains in a favorable position to address the threat of long-term supply shocks caused by the Middle East war, which could push up inflation and suppress growth. He said that if energy disruptions are quickly alleviated, the impact of the conflict this year may be partially reversed, but a prolonged crisis will bring more severe consequences. The war has boosted inflation through higher intermediate costs and soaring commodity prices, while suppressing economic activity.

Although potential inflation is heading in the “right direction,” upward price pressures have been transmitted to goods and services beyond energy, such as airline tickets, food, and fertilizers. Williams said that the current monetary policy stance can balance the risks to employment and inflation targets. Several Federal Reserve officials have previously said they are inclined to keep interest rates unchanged at the Washington meeting on April 28-29.

Williams expects U.S. economic growth of 2% to 2.5% this year, with an unemployment rate of about 4.25% to 4.5%, though signals from the labor market are contradictory; at the same time, he also expects inflation to be between 2.75% and 3% this year, falling back to 2% in 2027. (Jin10)