Federal Reserve Bank of New York President John Williams said rising long-term bond yields reflect a strong U.S. economy and economic outlook, rather than heightened inflation concerns. He cited substantial investment in artificial intelligence, data centers and technology, along with strong investment demand, as factors pushing yields higher. Williams said tariffs and the Middle East war are major reasons inflation remains above the Federal Reserve’s target, although inflation expectations remain contained and the central bank is not seeing second-round effects from tariffs. Recent inflation data have been encouraging, he said, while the labor market remains stable and solid. Williams said achieving 2% inflation in the foreseeable future remains the Fed’s primary objective. He supported the outcome of the July Federal Open Market Committee meeting and said he needs more data before the next meeting. He also said monetary policy implementation is working well and that Treasury debt management patterns do not complicate the Fed’s operations.