Fed's Williams: Expect inflation at 2.5% this year, closer to 2% next year

Federal Reserve (Fed) Bank of New York President John Williams noted on Thursday that, while inflation is still too high, he belives Fed policy is positioned to slowly get price growth back to the Fed's 2% annual target.

Key highlights

I expect unemployment at 4% by the end of the year.

I expect the US economy to grow 2%-2.5% in 2024.

Fed policy is well-positioned to get inflation back to the 2% target.

Inflation is still too high, but should moderate over the second half of 2024.

I expect inflation at 2.5% this year, closer to 2% next year.

Recently there's been a dearth of progress on lowering inflation.

The Fed will watch all of the data to make decisions on monetary policy.

Monetary policy remains restrictive on economy activity.

Risks to achieving the Fed mandates are moving into better balance.

Wage gains are still too high relative to the 2% inflation goal.

The economy is moving into better balance.

Inflation expectations data has been stable.

I feel god about where monetary policy is now.

Monetary policy is clearly working how the Fed wants it to work.

I don't feel urgency to act on monetary policy.

We don't need to be exactly at 2% to cut rates.