BlockBeats News, July 15th, New York Fed President John Williams today stated that the current approximately 4% inflation rate is "undoubtedly too high," but there are signs that inflation may have peaked, and it may gradually decline over the next few quarters. The current monetary policy stance is in a "good place." He listed six optimistic reasons: the price impact of tariff-driven inflation has largely dissipated; housing inflation is expected to continue to trend downward; oil prices may have already peaked; the supply-demand imbalance caused by AI investment may ease as supply increases; the current labor market is not further pushing up inflation pressures; and long-term inflation expectations remain stable.

Williams expects the overall inflation rate to drop to around 3.25% by the end of this year and return to the 2% target in 2028. He also noted that the recent resurgence of tensions in the Middle East has increased the uncertainty of energy price trends, and there is still significant uncertainty about the scale and duration of the supply-demand imbalance caused by AI investment.

Williams expects the U.S. economy to grow by 2% to 2.25% this year, and the unemployment rate to gradually decrease from the current 4.2% to 4% by 2028. After the June CPI data came in below expectations, the market's expectation of the July meeting keeping interest rates unchanged increased. Earlier, the Fed, at Powell's first meeting, kept the interest rate unchanged at 3.50% to 3.75%, but there is a clear internal divergence on whether a rate hike is needed this year—half of the 18 officials expect at least a 25-basis-point hike, while the other half believes no adjustment is necessary.

Powell emphasized during a Tuesday hearing in the House of Representatives that the June inflation improvement does not mean the job is done. The July meeting will focus on "how and when to use policy tools," and future policies will still depend on inflation data, energy prices, and economic growth.