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John Williams says inflation can keep easing without more Fed tightening

The New York Fed president expects inflation to slow to about 3.25% by year end and said expiring tariffs may not add further inflation pressure.

Reported · Written up by our desk · Central Banks

Markets looking for another Federal Reserve rate hike found a skeptical signal in comments from New York Fed President John Williams, who argued that inflation has likely peaked and should continue easing without additional policy tightening.

Williams laid out five reasons he expects disinflation to persist, including fading effects from this year’s inflation surge, limited incremental impact from tariffs because expiring duties are largely being replaced rather than substantially expanded, and oil-price pressures that he said have likely peaked and should move back toward earlier levels.

He also pointed to a labor market he described as solid and stable rather than overheating, anchored longer-run inflation expectations that reduce the risk of temporary price shocks becoming embedded, and an AI-related investment cycle that should become less inflationary as supply catches up.

Taken together, Williams said the current stance of monetary policy is positioned to bring inflation back to target, with restrictive policy able to do its work without further tightening for now, though he said the path may depend on whether higher oil prices persist as US-Iran conflict developments unfold.

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