Fed Williams: Inflation Expected to Ease, Rate Hikes Possible If Target Missed

Williams forecasts inflation decline in H2 2026 and next year, warning that the Fed will raise rates if progress toward the 2% target stalls.

Woofun AI reports that Federal Reserve Governor Williams expressed optimism that inflationary pressures will gradually ease, while cautioning that the central bank will raise interest rates if this trajectory fails to materialize. In a Reuters interview last Friday, Williams stated that if energy prices and trade tariffs have peaked, the factors driving inflation higher over the past year and a half should diminish, allowing earlier cooling forces to resurface. He emphasized close monitoring of core inflation data in the coming months to ensure alignment with the long-term stable 2% target by 2028. Williams noted his personal forecast indicates inflation will decline in the second half of this year and fall further next year. He described current interest rate policy as "well-positioned" but affirmed that taking action to return to the 2% path would be entirely appropriate if the current trajectory proves insufficient.