Williams says US economy resilient, giving Fed space to gather more data

• The US economy is highly resilient.
• Economic growth has accelerated.
• The country is dealing with unusual shocks on both supply and demand sides.
• The labour market remains exceptionally stable and solid.
• Tariff effects have largely moved through the system and are now mostly passed.
• Energy costs are percolating into inflation as anticipated.
• Inflation expectations over the longer term stay well anchored.
• Wage increases are consistent with the Fed's 2% objective.
• This is an opportune moment to gather additional data.

John Williams, President of the New York Federal Reserve, emphasised the resilience of the US economy and indicated the central bank can afford to take time to evaluate incoming information before making further policy choices.

According to Williams, economic expansion has gained pace. He described the US economy as remarkably resilient even while it deals with atypical supply and demand shocks. The labour market, he said, is remarkably stable and solid, implying employment conditions remain supportive for the outlook.

On inflation, Williams observed that the impact of tariffs has largely worked its way through the economy and is now mostly behind us. Energy costs are passing through to inflation as expected. He added that longer-term inflation expectations stay well anchored, and wage growth aligns with the 2% target.

Williams is relatively comfortable with the current economic backdrop and sees no need to hurry on interest rates.