John C. Williams, president of the Federal Reserve Bank of New York, described inflation as “unquestionably elevated” on June 25, delivering a message that should give pause to anyone hoping for a quick return to cheap money. His revised forecast now projects inflation won’t hit the Fed’s 2% target until 2028, a full year later than he expected just last month.
That’s the kind of timeline shift that matters. In May, Williams was telling markets that 2% inflation could arrive by 2027. Now he’s penciling in 3.5% by the end of 2026, with a gradual glide path through 2027 and a target landing only in 2028.
The policy stance and what it means
Williams characterized the Fed’s current monetary policy as “well positioned” to bring down price pressures.
The Federal Open Market Committee held the federal funds rate steady at 3.50%-3.75% at its June meeting. That decision preceded Williams’ remarks and appears to reflect the broader committee’s comfort with a wait-and-see approach.
