Modest Tariff Effects Now, But Greater Impact Ahead

John Williams, President of the Federal Reserve Bank of New York, highlighted the current modest effects of tariffs on the economy but warned of increasing impacts in the near future. Speaking before the New York Association for Business Economics (NYABE), Williams emphasized the gradual nature of tariff effects.

Monetary Policy Stance Supports Economic Goals

Williams pointed out that the current modestly restrictive monetary policy is optimal for achieving the Fed's dual mandate of maximum employment and price stability. This approach allows the Fed to carefully assess incoming data and the evolving economic outlook.

Expected Inflation Boost from Tariffs

"I expect tariffs to boost inflation by about 1 percentage point over the second half of this year and the first part of next year," Williams stated, underscoring the direct impact of trade policies on inflation rates.