New York Fed President Williams worries war will slow growth, aggravate inflation

• Williams worries the Middle East conflict will slow growth and aggravate inflation, introducing substantial risk and heightened uncertainty.
• He notes the economy has been resilient to uncertainty with strong consumer spending and solid business investment, and current monetary policy is 'well positioned to balance the risks'.
• Conflicting signs are observed in the labor market, with some data pointing to stabilization and others to softening, creating a bifurcated experience for those with jobs versus those looking for work.
• Tariff effects are expected to wane, potentially putting downward pressure on core inflation, but the Middle East conflict could still result in a large supply shock.

New York Fed President John Williams expressed concerns that the Middle East conflict will slow growth and aggravate inflation, introducing substantial risk and heightened uncertainty. While noting the economy's resilience and monetary policy's position to balance risks, he also highlighted conflicting labor market signs and the potential for a large supply shock.