New York Fed President John Williams said he expects inflation to continue easing but warned the Federal Reserve is prepared to raise interest rates if needed to bring inflation back to its target.Williams told Reuters that inflation could ease if energy prices and trade tariffs have peaked and the economy remains resilient, as recent inflationary pressures fade and disinflationary trends re-emerge.
The NY Fed Chief said he is closely watching core inflation over the coming months to determine whether it is on a sustained path toward the Federal Reserve's 2% target by 2028.
"My forecast personally is for inflation to come down in the second half of this year and come down further next year," he stated, while adding that the current Fed interest rate stance is "well positioned" to bring inflation back to target.
Williams stated that he "strongly … supported the decision of the committee" to hold rates steady.
He also said that it would be "appropriate" for the Fed to act if the economy is not on track to bring inflation back to its 2% target.
