TechFlow News, April 16: New York Fed President John Williams reiterated that monetary policy remains in a favorable position to address the threat of prolonged supply shocks stemming from the Middle East conflict—which could push up inflation and dampen growth. He noted that if energy disruptions ease rapidly, the conflict’s impact could be partially reversed this year; however, a protracted crisis would bring more severe consequences. The war has already driven up inflation and curbed economic activity through surging intermediate costs and commodity prices.
Underlying inflation is moving in the “right direction,” yet upward price pressures have spread beyond energy to other goods and services—including airfares, food, and fertilizer. Williams stated that the current monetary policy stance strikes an appropriate balance between risks to employment and inflation objectives. Several Fed officials have previously indicated their preference to hold rates steady at the Washington meeting scheduled for April 28–29.
Williams projects U.S. economic growth this year at 2%–2.5%, with unemployment at approximately 4.25%–4.5%; however, labor market signals remain mixed. He also forecasts inflation this year at 2.75%–3%, declining to 2% by 2027. (Jinshi)
