Fed's Williams: There's a lot of uncertainty, but the economy has been more resilient than expected

Thank you to the Staten Island Economic Development Corporation for hosting today’s event. My last regional visit to Staten Island was a virtual one during the pandemic. Even then, I rode the ferry to simulate the true Staten Island experience before heading into a full day of online discussions about economic conditions in the borough. So, it was a thrill to ride the boat over this morning before visiting local businesses and meeting with leaders in person. The ferry is so iconic that it is immortalized by a Bob Dylan lyric. But traffic patterns on the island can be a unique experience, too. Let’s chalk that up to a strong New York economy that has recovered and then grown in the post-pandemic era. That rebound has been the center of many conversations I’ve had today, and we can continue that discussion here as well. But first, I’ll share some prepared remarks about the U.S. economy and how the Federal Reserve is working to achieve its dual mandate goals of maximum employment and price stability. Before I go further, I must give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee (FOMC) or others in the Federal Reserve System. Fed's Williams speaking: Tariffs and Iran war will push headline inflation higher Federal Reserve Bank of New York President John Williams said monetary policy remains appropriately positioned to navigate what he described as an “unusual set of circumstances,” as geopolitical tensions and trade policy shifts complicate the inflation outlook. Echoing Powell from earlier on Monday. Speaking in prepared remarks, Williams highlighted that the ongoing Middle East conflict and tariff measures are likely to push headline inflation higher in the near term, primarily through elevated energy prices and rising input costs. He warned that the war could act as a classic supply shock, simultaneously lifting inflation while weighing on economic growth, a dynamic already beginning to emerge in incoming data. Despite these pressures, Williams emphasised that longer-term inflation expectations remain anchored around the Federal Reserve’s 2% target, suggesting policymakers may be willing to look through temporary energy-driven price increases unless they spill over into broader underlying inflation. The comments reinforce a cautious policy stance from the Fed, with officials reluctant to commit to near-term rate adjustments amid heightened uncertainty. Williams did not indicate any urgency to shift interest rates, arguing that the current policy setting strikes a bal FED’S WILLIAMS: EXPECTS INFLATION ~2.75% THIS YEAR, RETURNING TO 2% BY 2027 FED’S WILLIAMS: US ECONOMY REMAINS RESILIENT; GDP SEEN AROUND 2.5% ... FED’S WILLIAMS: NO CLEAR SECOND-ROUND INFLATION IMPACT FROM TARIFFS YET FED’S WILLIAMS: WAR COULD BOTH INCREASE INFLATION AND SLOW ECONOMIC GROWTH

*NETANYAHU: IRAN WAR PAST HALFWAY IN TERMS OF MISSIONS, NOT TIME ISRAELI PM NETANYAHU: US SPEARHEADING MILITARY EFFORT TO REOPEN STRAIT; TRUMP'S PRESENT PRIORITY IS IRAN'S ENRICHED URANIUM