MNI BRIEF: Williams - See No Need To Adjust Rates Anytime Soon

Federal Reserve Bank of New York President John Williams said Thursday he sees no need to adjust interest rates "anytime soon," adding monetary policy is in a good place to respond to economic developments. Tariffs will cause higher inflation and slower growth this year, but how long the effects will last is uncertain, he said.  

"Monetary policy is well positioned. I don't see any need to change the setting of the fed funds rate anytime soon. And it's really about collecting information, understanding better what's happening in the economy during the rest of this year, understanding kind of how the uncertainty plays out," he said in a Fox Business interview. 

Fed funds futures markets are pricing in three to four cuts this year, but the modal outlook from options prices is for one to two rate cuts this year, little changed over the last few months, Williams said. "My basic views on where monetary policy should be haven't fundamentally changed." 

Tariffs are expected to raise prices this year, he said. "The big unanswered question is to what extent inflation remains high in 2026 or even longer. We need to make sure that any one-time changes in prices don't pass through to more persistent higher inflation." (See: MNI INTERVIEW: Fed Needs More Hawkish Message - Emmons)