According to ChainCatcher, citing Jinshi, Williams of the Federal Reserve predicts that tariffs will drive up inflation, suppress economic growth, and states that the Federal Reserve's monetary policy stance is "in the best position to manage these risks as much as possible."
He said, "During periods of uncertainty, consumers may postpone major decisions such as buying a house or a car, and businesses may delay investments until they have a better understanding of the future." "When households and businesses cut spending, economic growth will slow down."
As February data shows inflation remains above the target, Williams stated that maintaining interest rates at a level that moderately suppresses the economy is correct. "The current moderately tight monetary policy stance is entirely appropriate," he said.
Williams also said: "During turbulent and uncertain times, good long-term inflation expectations are crucial to ensuring sustained price stability." "Maintaining inflation expectations is critical as we pursue our maximum employment goal and our long-term goal of bringing inflation back to 2%."
