John Williams, president of the Federal Reserve Bank of New York, predicted that despite surging oil prices due to the Iran war, core inflation excluding food and energy would not rise significantly. He also assessed that there is no need to change the current benchmark interest rate of 3.50–3.75%.
In an interview with Bloomberg TV on the 7th (local time), President Williams said, "The situation has not changed significantly (due to the Iran war)," and predicted that "core inflation excluding food and energy will only rise by an additional 0.1 to 0.2 percentage points." The New York Fed president is considered the de facto second-in-command of the Federal Reserve (Fed), as the New York Fed president is the only regional Fed chief with a permanent voting seat on the Federal Open Market Committee (FOMC).
President Williams went on to say that overall inflation would rise further due to the fallout from the Iran war and other factors, and revealed that he had lowered his forecast for U.S. economic growth this year from the previous 2.50–2.75% to 2.00–2.50%. Citing the uncertainty of the Iran war, Williams pointed out that there is no need to rush to change the benchmark interest rate. He said, "Current monetary policy is in a very favorable position to monitor the economic fallout from the Middle East war," adding that "monetary policy is exactly where it needs to be, and we can respond as the situation changes." Regarding employment, President Williams stated emphatically, "The labor market is currently showing very stable conditions," and "it is absolutely not weakening."
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