New York Federal Reserve President John Williams said Monday that U.S. monetary policy remains well positioned to address economic uncertainty stemming from the Middle East war. Williams spoke at a Cynosure Group gathering in New York City.

Williams said inflation will likely reach 3% this year before returning to the Fed's 2% target in 2027. He cited tariffs and energy costs as major inflation drivers while noting that underlying inflation remains mostly stable.

The Fed official projected economic growth between 2% and 2.25% this year, with unemployment staying in the 4.25% to 4.50% range. He described the economy as resilient despite facing what he called "an unusual set of circumstances."

"The risks to both sides of our mandate have increased," Williams said, referring to the Fed's dual mandate of price stability and full employment. He noted that supply chain disruptions are emerging and that the duration of effects from Middle East supply disruptions and higher energy prices will shape the global economic outlook.

Williams said energy market expectations appear benign but warned of "plausible" scenarios involving more severe price and supply dislocations. He stated there is no way to know how the Iran war impact will affect the U.S. economy.

The remarks represented Williams' first public comments since the central bank's decision to keep rates unchanged amid ongoing uncertainty about the war's economic effects.