Fed’s Williams Signals Steady Rates in Face of War’s Risks

Article content(Bloomberg) — Federal Reserve Bank of New York President John Williams reiterated monetary policy remains well positioned to deal with the threat of a protracted supply shock caused by war in the Middle East that could raise inflation and dampen growth in the US.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentWilliams said the impact of the conflict could partly reverse this year if energy supply disruptions eased soon. But a more extended crisis could have more severe implications.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article content“The conflict could also result in a large supply shock with pronounced effects that simultaneously raises inflation — through a surge in intermediate costs and commodity prices — and dampens economic activity,” Williams said Thursday in remarks prepared for an event in New York City.Article contentArticle contentWhile underlying inflation has been moving in the “right direction,” Williams said the the war’s upward pressure on prices was already showing up in goods and services outside energy.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“Not only are elevated energy prices showing up in the rising cost of fuel, but there are also pass-through costs in the form of higher airfares, groceries, fertilizer and other consumer products.”Article contentNonetheless, he added, “the current stance of monetary policy is well positioned to balance the risks to our maximum employment and price stability goals.”Article contentSeveral Fed officials have signaled they favor holding interest rates steady when they meet April 28-29 in Washington.Article contentWilliams said he still sees the US economy growing at 2% to 2.5% this year, while unemployment should hover between 4.25% to 4.5%. But there are “conflicting signs” in the labor market, as hard data points to a stable outlook while soft data — such as the New York Fed’s survey of consumer expectations — signals a continued gradual softening.Article contentWilliams expects headline inflation to end this year at 2.75% to 3%, before easing back to the 2% target in 2027.Article contentTrending The Great Correction: Not even Wayne Gretzky's hometown could escape the crash of the 'exurbs' Real Estate Posthaste: What Mark Carney's gas tax cut could mean for the Bank of Canada News Trump isolation deepens on world stage as allies rebuff, condemn PMN Business Why first-time homebuyers are still treading cautiously this spring Real Estate What is Anthropic's Mythos AI model and why does it have the financial world in a panic? Innovation Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.

The Great Correction: Not even Wayne Gretzky's hometown could escape the crash of the 'exurbs' Real Estate Posthaste: What Mark Carney's gas tax cut could mean for the Bank of Canada News Trump isolation deepens on world stage as allies rebuff, condemn PMN Business Why first-time homebuyers are still treading cautiously this spring Real Estate What is Anthropic's Mythos AI model and why does it have the financial world in a panic? Innovation