Federal Reserve Bank of New York President John Williams reassured markets on Friday that inflation expectations remain stable, saying there is “no sign of inflation expectations becoming unmoored at any forecast horizon relative to the pre-pandemic period.”
Addressing the U.S. Monetary Policy Forum in New York, Williams said measures of inflation expectations have returned to levels seen between mid-2013 and mid-2016. He noted that those earlier readings fell during a period of persistently low inflation prior to the pandemic, and current measures now reflect a recovery to that prior range.
This steadiness comes amid concerns that proposed large tariffs by the Trump administration could raise price pressures. Most economists expect such import taxes—whose burden typically falls on U.S. consumers—to push inflation higher, but so far the inflation expectations observed by the New York Fed have not shown a sustained rise.
Williams made these comments while discussing a paper presented at the conference rather than announcing any change in policy. Earlier in the week he signaled that there was no immediate need to alter monetary policy, and his remarks reinforced the view that, for now, market-based and survey-based measures of inflation expectations remain well-anchored.