Fed's Williams: The economy does not have stagflation right now

Federal Reserve (Fed) Bank of New York President John Williams noted on Monday that while the US economy isn't presenting evidence of "stagflation", a difficult period marked by rising inflation coupled with slumping economic stability, trade policy uncertainty remains a key issue for policymakers.

Key highlights

The full impact of tariffs can play out over long horizon.

Tariffs will impact prices.

We need an open mind on how long tariff impacts will last.

Consumer goods should see quick pass-through from tariffs.

Intermediate goods could see a slow impact from tariffs.

There is definitely a risk to inflation being higher than Fed forecasts.

My forecast is that inflation will be relatively stable this year with upside risks.

My baseline view is inflation will be relatively stable.

Uncertainty is very high right now, there are more concerns about a slowing economy.

Growth and inflation risks are both very important.

I will not predict odds of recession, economy is currently very solid amid a good job market.

The economy right now is in a very good place.

I won't discount weak survey and anecdotal data.

Uncertainty appears to be impacting behavior.

The Fed will not allow high inflation to take root.

The economy does not have stagflation right now.

I expect the economy will continue to grow, but slower than last year.

Policy is really well positioned to navigate uncertainty.

The Fed has the ability to collect more information before changing policy.

I do not know exactly where monetary policy needs to be over rethe mainder of the years.

The Fed needs to keep longer run inflation expectations anchored.

Long-term inflation expectations are well-anchored today.

Fed balance sheet draw down slowdown was natural next step.