John Williams said renewed Middle East fighting has not yet changed the Fed's near-term policy analysis, while warning inflation remains “far too high” and should take priority over employment risks as oil prices eventually retreat.
Federal Reserve Bank of New York President John Williams said he still expects oil prices to ease over the next six to 12 months despite renewed fighting in the Middle East, while stressing that inflation remains “far too high” and is the bigger risk to the Federal Reserve’s dual mandate of stable prices and maximum employment. Speaking at the New York Fed, Williams said policymakers had not yet begun analyzing how recent events might affect the July 28-29 Federal Open Market Committee meeting, and added that the labor market appears stable. He also said any changes to the Fed’s balance sheet should prioritize banking-system safety and stability.