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(Bloomberg) — Federal Reserve Bank of New York President John Williams said he expects falling energy prices to drive a drop in overall inflation over the next few months, while reiterating the central bank’s policy is in a good place for now.
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“I do feel a little bit more positive about the near-term inflation outlook because of the energy price declines that we’re going to see,” Williams said Tuesday during an interview on Fox Business. “My view is that monetary policy is well-positioned,” to achieve the Fed’s mandate, he added.
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Before that decline, however, the Fed’s preferred inflation gauge jumped to 4.1% in May from a year earlier, with core prices, excluding food and energy, up 3.4%.
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Williams also said the job market was stabilizing, while economic growth remains solid.
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The New York Fed chief said there was “strong agreement” across the Federal Open Market Committee’s members to remove guidance on the future path of interest rates from the statement that followed their June meeting.
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“Given the uncertainties that we face in terms of inflation, the economic outlook, trying to give explicit forward guidance about where interest rates are going to be was no longer appropriate,” he said. “The uncertainties are too great.”
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The Fed has held its benchmark interest rate steady in 2026, but investors have raised their bets that officials will lift rates before year-end given sustained inflationary pressures. Policymakers have offered few clues on what they plan to do when they next meet in Washington at the end of this month, though nine officials penciled in at least a quarter-point hike in 2026 in their latest set of economic projections.
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