Fed’s Williams pushes back inflation target to 2028

Investing.com -- Federal Reserve Bank of New York President John Williams said today that inflation remains too high and pushed back his expectation for reaching the Fed's 2% inflation target from 2027 to 2028.

Williams said inflation is elevated and well above the Federal Open Market Committee's longer-run goal of 2%. He stated it is "imperative" that the Fed restore inflation to its 2% longer-run goal on a sustained basis.

The Fed official expects inflation to moderate to 3.5% this year. He said inflation pressures are likely to moderate but remain too high.

Williams noted that if Middle East war disruptions are resolved soon, this will lower inflation pressure. He added that the Middle East war continues to contribute risks and uncertainties. The U.S. has thus far been resilient against the war's economic impact, Williams said.

The New York Fed president said monetary policy is "well positioned" for the current economy. He expects the U.S. economy to grow at 2.25% with unemployment declining to 4% in 2028.

Williams said the job market has proved to be resilient. He noted that standing repo operations are a key tool to cap interest rate pressure and that the Fed will adjust reserve management buying as needed.

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