Fed's Williams sees no looming need to change monetary policy: Report

Federal Reserve Bank of New York President JohnWilliamssaid Thursday heseesno imminentneedfor achangein central bank interest ratepolicyas Trump administration tariffs are likely to drive up inflation, weaken growth and push up unemployment.

“I thinkmonetarypolicyis well positioned,”Williamssaid in an interviewwith Edward Lawrenceon television channel Fox Business. “I don’t see anyneedtochangethe setting of the fed funds rate anytime soon.”

Williams, who also serves as vice chairman of the rate-setting Federal Open Market Committee, noted in his interview there was considerable uncertainty around the outlook. Hereiteratedhis view that growth is likely to slide under 1% this year amid a rise in the unemployment rate from the current 4.2% to between 4.5% and 5%, as President Donald Trump’s import tax surge pushes up price pressures at least for now.

“That’s not a recession, that’s just a slower outlook, slower growth than you’ve seen in the past couple years,”Williamssaid.

The Fed official did not say how much he expects Trump’s import tax increases to drive up inflation but said “we will definitely get effects on prices and inflation this year from tariffs.”

Williamssaid it was critical for the Fed to make sure any of those inflation rises do not prove enduring.

“Weneedto make sure that any one-timechanges in prices don’t pass through into more persistent higher inflation,” he said, adding “weneedto get inflation back to 2%…and do that on a sustained basis.” He added keeping inflation expectations in check remains important.

Williams’ interview came a day after Fed Chair Jerome Powellspoke, with the central bank leader also warning of higher price pressures due to tariffs. Powell said that now was a time for the central bank to watch the economy for fresh data before changing rates.

Those comments earned Powell a fresh rebuke from the president, who wants the Fed to cut rates despite inflation that is above target. The president also appeared to threaten Powell’s job, sayingtermination“cannot come fast enough.”

If Trump were to try to fire Powell, it remains unclear the law would support such a move and it would almost certainly spark a major market crisis amid already unsettled financial conditions. Powell’s current term as Fed chair extends to next year.