Fed's Williams on Inflation, Monetary Policy, Labor Market

• Headline inflation is expected to be elevated in the middle of the year, with a full-year forecast around 2.75%.
• Core inflation is currently around 2.5%, with energy prices adding a tenth or two, but tariffs are coming down.
• Monetary policy is 'exactly where it needs to be,' allowing the Fed to 'wait and see' on future economic impacts.
• The US economy is 'remarkably resilient, innovative, and dynamic,' with growth forecasts for this year lowered to 2-2.5% due to geopolitical conflict.
• The labor market is stable, with unemployment at 4.3% and compensation growth consistent with productivity, not pushing inflation higher.

New York Fed President John Williams discusses the economic impact of the war in Iran, stating that headline inflation will be elevated due to energy prices, but core inflation remains around 2.5%. He views current monetary policy as well-positioned to 'wait and see' on further developments, noting the economy's resilience and a stable labor market despite consumer pessimism.