Fed's Williams: Inflation Has Run Too High for Too Long

New York Fed President John Williams isn't sugarcoating it: inflation has been too hot for too long. Speaking Friday at the European Central Bank's Conference on Money Markets, he said the Fed still needs to get price growth back to its 2% target, and to do it without dragging its feet.

Williams pointed a finger at energy costs, saying those increases are feeding through into airfares, just as the Fed expected. On artificial intelligence, he poured cold water on the hype — its effect on inflation has been limited, showing up mainly in chip prices.

The tariff conversation got a similarly calm read. Williams said the fallout from President Donald Trump's global tariffs is 'mostly behind us,' suggesting the trade shock has largely already worked its way through the economy.

As for the job market, Williams called it 'unusually' stable and robust, and described the broader US economy as 'remarkable' in its resilience. That's a notably upbeat read from a central banker still chasing a 2% inflation target.

The takeaway from Williams' remarks: the Fed sees an economy holding up well, an inflation problem that's lingering rather than spiraling, and little reason to panic over tariffs or the AI boom. Timely progress toward 2% remains the goal.