Williams stated he expects the economy to remain on “strong footing,” with real GDP growth of about 2.5% this year, supported by financial stimulus, “beneficial financial conditions, and robust financial investments in artificial intelligence.”
He described a “low‑hire, low‑fire” labor market that supports, and stated he expects the joblessness rate to “edge down over the course of this year and next year.”
Tariffs, he said, have been “a significant motorist of inflation,” but he anticipates that influence to fade, permitting inflation, as measured by the Fed’s preferred PCE gauge, to reduce to around 2.5% this year and return to 2% in 2027.
Williams did not deal with the Iran conflict in his text, even as markets reacted to increasing geopolitical threat premia in oil. Rather, he stressed that there are “no indications of considerable second‑round effects from tariffs,” which inflation expectations remain well anchored.
Meanwhile, Federal Reserve guv Stephen Miran previously stated that 4 quarter‑point cuts “are suitable” for 2026 which he would “rather get them earlier than later,” indicating remaining threats for workers even after a remarkably strong January payrolls report.