Top three officials of the Federal Reserve: Impact of tariffs on prices is "one-time" Current interest rates will stabilize employment and inflation.

New York Fed President John Williams said that the current interest rate level is in a "favorable position" and is sufficient to stabilize the labor market and bring the inflation rate back to the Federal Reserve's 2% target. Williams pointed out that after the Federal Open Market Committee (FOMC) cut rates by 75 basis points last year, the risks facing the dual mandate of the US central bank have reached a "better balance". In a speech prepared for the Council on Foreign Relations (CFR) event on Monday, he said, "Monetary policy is now in a good position to support the stability of the labor market and bring inflation back to the FOMC's long-term target of 2%." Williams is one of many Fed officials who have suggested that the Fed can afford to "wait for more data before considering another rate cut." According to the latest economic forecasts released in December, the median forecast of policymakers shows that there will be only one 25 basis point rate cut in 2026. He said, "I expect the unemployment rate to stabilize this year and then gradually decline over the next few years," adding that labor market indicators are currently at pre-COVID levels, following a gradual cooling trend. "I want to emphasize that this is a gradual process, with no signs of a surge in layoffs or other rapid deterioration." Regarding the import tariffs imposed by the Trump administration, Williams believes that the impact on prices will be "largely one-time." He expects the inflation rate to peak at 2.75% to 3% in the first half of this year, and then fall below 2.5% for the full year. He added that the economy will continue to grow at an above-trend pace. Many policymakers are concerned about the continued price pressures as inflation has remained above the Fed's target for nearly five years. According to the minutes of the December meeting, some officials were cautiously supportive of a 25 basis point rate cut in the rate decision at that time, and said they could easily be convinced to maintain rates instead.