Fed's Williams: Current interest rate stance still "completely appropriate"

The Federal Reserve's Williams signaled reluctance to support a rate cut ahead of this month's FOMC meeting, arguing that tariffs could push up inflation further. Williams said price data already shows that new trade barriers erected by the Trump administration are raising the cost of some consumer goods. Williams predicted that there could be more price increases in the future. "For those goods that are more vulnerable to higher tariffs... the price increases so far this year have far exceeded expectations based on past trends." Williams was referring to products such as home appliances, musical instruments and luggage. Williams said the Fed should be cautious about lowering the base rate for now, given the risk of inflation accelerating for the rest of 2025. "It is entirely appropriate to maintain this moderately restrictive stance of monetary policy," Mr. Williams said. He also expects unemployment to rise to 4.5 per cent by the end of 2025, inflation to be as high as 3.5 per cent and growth to be about 1 per cent this year, a marked slowdown from last year.