Williams of the Federal Reserve said he now expects the 2% inflation target to be postponed until 2028. He added that monetary policy is well‑aligned with the current economic conditions and that inflation is projected to reach about 3.5% this year.
He noted that if disruptions from the Middle East war are resolved soon, inflationary pressures should ease and the economy has shown resilience to war‑related shocks. Williams also highlighted the importance of repo operations as a key tool for managing interest‑rate pressure and indicated that the Fed will adjust reserve‑purchase operations if necessary.
The official forecasted 2.25% GDP growth and a 4% unemployment rate by 2028, while stressing that the labor market has remained flexible despite ongoing risks from the Middle East conflict.