Federal Reserve Bank of New York President John Williams said rising long-term bond yields primarily reflect a strong U.S. economy and outlook, supported by investment in artificial intelligence, data centers and technology, rather than fears about inflation. He said higher borrowing costs do not automatically determine monetary policy, whose central responsibility remains returning inflation to the Federal Reserve’s 2% target. Investors widely expect the Federal Reserve to raise its 3.5% to 3.75% federal funds target rate range at the Sept. 15-16 Federal Open Market Committee meeting. Williams said recent inflation data have been encouraging but that policymakers cannot assess the trend from only one or two months of data. He identified trade tariffs and the Middle East war as the main reasons inflation is above 2%, while saying inflation expectations remain contained. Williams said his decision will depend on incoming data and risks to the Fed’s goals. He also said Treasury Department efforts to manage borrowing costs do not fundamentally alter the central bank’s work.