Fed’s Williams highlights uncertainty tied to fiscal, trade, and regulatory Policies

New York Fed President John Williams said today that monetary policy remains “well-positioned” to balance Fed’s dual mandate of stable prices and maximum employment. He noted that the process of disinflation is expected to persist, though achieving the 2% target may take time, with a return to the goal likely “in the coming years.” The pace and direction of monetary policy, however, remain highly data-dependent

Williams highlighted significant uncertainties clouding the economic outlook, including risks related to fiscal policies, trade dynamics, immigration changes, and regulatory shifts.

Therefore, “our decisions on future monetary policy actions will continue to be based on the totality of the data, the evolution of the economic outlook, and the risks to achieving our dual mandate goals,” he added.

Separately, Richmond Fed President Thomas Barkin commented on the December CPI report released today, acknowledging that it reinforces the narrative of inflation gradually declining toward Fed’s target. Barkin also downplayed the potential impact of rising 10-year Treasury yields on the Fed’s monetary policy stance.