The president of the New York Federal Reserve, John Williams, said Friday that current commercial policies of the Trump government will accelerate inflation this year, While adding that it is essential that the US central bank prevent the longest expectations of prices for pressures.
“It is difficult to know precisely how the economy will evolve”said Williams in statements prepared to the Chamber of Commerce of Puerto Rico.
“Given the uncertain effects of recently announced tariffs and other policy changesthere is an unusually wide range of results that could perspire. “
In the light of this uncertainty linked to the measures of President Donald Trump to impose strong import taxes on a wide range of United States commercial partners, It is likely that the strong start of the year of the economy will give way to something less favorable, said Williams.
The Fed will have to observe the data with attention during this period to know how to react with monetary policyhe added.
Williams said that tariffs expect inflation to 3.5% -4% this year, which would represent a marked increase in pressures on prices from the current level of the Personal Consumer Expenses Index, which was 2.5% year -on -year in February. The PCE is the main inflation indicator of the Fed.
“Given the combination of the deceleration of the growth of the active population due to the reduction of immigration and the combined effects of uncertainty and tariffsnow I hope that real GDP growth slows down a lot from the rhythm of last year, Probably up to just under 1%”, while the unemployment rate should increase from its current level of 4.2%to 4.5%-5%.
Williams said he is still determined that inflation is again in the 2% target set by the Fed. Although short -term inflationary expectations have increased, the long -term ones have been maintained under control, and it is essential that the entity remains like this, aggravated.
“Monetary policy is in an adequate position to manage those risks the best We can “and its” modestly restrictive “level is the appropriate given the current level of inflation, he said.
The current position of the Fed in terms of rates “gives us the opportunity to evaluate the data and events that occur And, ultimately, it places us in a good position to adjust to the changing circumstances that affect the achievement of our double mandate goals, “he added.
