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Federal Reserve Bank of New York President John Williams reassured markets on Friday that inflation expectations remain stable, with “no sign of inflation expectations becoming unmoored at any forecast horizon relative to the pre-pandemic period.”
Speaking at the U.S. Monetary Policy Forum in New York, Williams highlighted that these expectations have fully returned to levels observed between mid-2013 and mid-2016, before they declined during the pre-pandemic period of persistently low inflation.
This stability comes despite concerns that the Trump administration’s proposed substantial tariffs could increase price pressures, as most economists anticipate these import taxes—largely paid by Americans—will push inflation higher.
Nevertheless, inflation expectations tracked by the New York Fed have remained muted thus far. Williams, who earlier this week indicated no immediate need to adjust monetary policy, made these remarks while discussing a paper presented at the conference rather than offering specific policy guidance.
