Fed's Williams: Current moderately restrictive monetary policy is appropriate

Federal Reserve Bank of New York President John Williams said late Wednesday that monetary policy is in the right place to allow the Fed to monitor the economy before taking its next decision, per Reuters. Williams added that the impact of trade tariffs is only just starting to hit the economy.

Key quotes

Current 'modestly restrictive' monetary policy is appropriate.
Current state of interest rate policy allows Fed time to analyze data.
Tariff impact modest so far but will increase over time.
Tariffs should boost inflation one percentage point rest of 2025 into 2026.
Will need to watch data to understand tariff impact.
It's 'early days' for impact of tariffs on economy.
Overall inflation likely at 2.5% in June, core at 2.75%.
Right now, economy in good place, labor market is solid.
Job growth and labor supply are both slowing.
Economy beset by heightened uncertainty.
U.S. economy to grow around 1% this year.
Unemployment to rise to 4.5% by year's end.
Inflation to stand at between 3%-3.5% this year.
Inflation to ease to 2.5% next year, 2% in 2027.

Market reaction

At the time of writing, the US Dollar Index (DXY) is trading 0.02% higher on the day to trade at 98.30.