Federal Reserve's Williams: Expected tariffs to exacerbate inflation and slow economic growth

On April 11, the Federal Reserve's Williams predicted that tariffs would drive up inflation and dampen economic growth, and said the Fed's monetary policy stance was "in the best position to manage these risks to the best of our ability." He said, "During times of uncertainty, consumers may delay making major decisions, such as buying a home or a car, and businesses may delay investing until they have a better sense of the future." When households and businesses cut back on spending, economic growth slows. "With February data showing inflation still above target, Williams said the Fed was right to keep interest rates at a level that moderately dampens the economy." The current moderately tight monetary policy stance is entirely appropriate, "he said. Mr. Williams added:" In times of volatility and uncertainty, good long-term inflation expectations are critical to ensuring continued price stability, "and" maintaining inflation expectations is critical as we pursue our maximum employment objective and our long-term objective of returning inflation to 2 per cent. "