On Monday, August 3, Reuters published a transcript of an interview with New York Fed President John Williams, who discussed his outlook for inflation, monetary policy, and the FOMC’s commitment to achieving price stability.
He said:
“We should see the underlying disinflationary trends . . . continue. I think monetary policy currently is well positioned in where we are today to support that disinflationary path.”
“[I]f the economy is not on a trajectory that will bring inflation back down to 2% . . . it would absolutely be appropriate to act to get us on a trajectory that does bring inflation back to 2%.”
“All of these questions about how do we communicate, is it useful to structure communications around thinking about the economy—it’s always based on one question: How do we best achieve our goals?”
In the interview, President Williams said that specific circumstances have been driving inflation, including tariffs and the conflict in the Middle East, and that he expects inflation to come down in the second half of this year and fall further next year.
While acknowledging persistent uncertainty around how the economy will evolve, he said the FOMC remains “laser focused” on achieving its 2% inflation goal.
“This is a period of time where we’re facing a lot of factors that are influencing the economy,” he said. “There’s a debate about how do we best achieve our goals, but there’s absolutely no debate about the importance of achieving maximum employment and price stability.”
He also discussed how the Fed monitors developments in financial markets. “Of course, what’s happening in financial markets is an important part of that transmission of monetary policy back to the economy,” he said.
Read the full transcript (originally published by Reuters, also available via Yahoo! Finance).
Brian Manning is a corporate communications specialist in the Communications and Outreach Group at the New York Fed.
The views expressed in this article are those of the contributing authors and do not necessarily reflect the position of the New York Fed or the Federal Reserve System.
