Fed's Williams: Time is right to gather more information

The US economy remains remarkably resilient and the labour market is stable and solid, New York Federal Reserve (Fed) President John Williams said on Friday, according to Reuters.

Main points from Williams’s remarks

"Inflation too high for too long."

"We've seen tariffs effect work way through, mostly now behind us."

"Energy prices showing up in airfares in expected way."

"We've seen narrow effect of AI in prices such as chips."

"Essential that we bring inflation to 2% in timely manner."

"Monetary policy takes a year or two to take effect, we have to be forward looking."

"Inflation expectations well anchored, wage growth consistent with goal."

"This is appropriate time to accumulate more information."

Williams highlights persistent inflation alongside US economic resilience

A 6/10 FXS Speechtracker score, against a historical baseline of 5.4/10, placed Fed’s Williams moderately on the hawkish side of the historical average. His remarks highlighted a “remarkably resilient” US economy, firmer growth and a robust labour market. Although tariff and energy effects were described as largely behind us, with inflation expectations remaining well anchored, his insistence that inflation has been “too high for too long” and that a timely return to 2% is “essential” points to a preference for maintaining restrictive policy while remaining guided by the data. By describing the current period as an “appropriate time to accumulate more information”, Williams indicated a preference for waiting rather than easing imminently. Despite some qualifications concerning temporary price drivers, that stance should help contain near-term downside for the Dollar.