🔥Fed Williams: Committed to bringing inflation back to 2%, energy prices have peaked


Statements by New York Fed Chair Williams:
- Not expecting energy prices to rise for the rest of the year, even if Middle East conflict flares up again. “The market still expects oil prices to fall over the next 6-12 months; that is a reasonable baseline scenario. Energy prices are likely around their peak and will cool over time”
- Stressed that inflation is still “too high”; the Fed focuses on the risk of keeping prices stable. May PCE: 4.1%, core PCE: 3.4% — far above the 2% target
- The Fed is closely monitoring how energy prices feed into inflation
- AI investment is currently a driver of inflation, increasing pressure on both demand and costs
- Refused to comment on the interest rate decision at the meeting on 28-29/7: “We haven’t even started analyzing”
-> Since Warsh dropped forward guidance in the FOMC minutes, the market needs more pricing data, so remarks by regional Fed presidents now carry more weight than usual.
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