Inflation Set to Cool as Energy Prices Move Closer to Pre-Iran War Levels, New York Fed's Williams Says
Inflation should ease in the next few quarter as energy prices are expected to trend back closer to where they were before the US-Iran war began, Federal Reserve Bank of New York President John Williams said Wednesday. Overall inflation, as measured by the personal consumption expenditures price index, is "unquestionably too high" at about 4%, but is expected to decline to around 3.25% by year-end, Williams said in remarks prepared for an event in New York. Inflation should continue to cool and hit the Fed's 2% goal in 2028, he said. "There are encouraging reasons to expect that inflation has peaked and should edge down in coming quarters," Williams said. One of the factors he cited was expectations around energy prices returning to pre-Iran war levels. "Based on oil prices today and futures market pricing into next year, it appears that prices for energy and related goods have likely peaked and will come down closer to levels seen before the initial closure of the Strait of Hormuz," Williams said. "Of course, this situation is fluid and subject to a great deal of uncertainty." Crude prices plunged in May and June, but have rallied this month as tensions between the US and.
Inflation should ease in the next few quarter as energy prices are expected to trend back closer to where they were before the US-Iran war began, Federal Reserve Bank of New York President John Williams said Wednesday.
Overall inflation, as measured by the personal consumption expenditures price index, is "unquestionably too high" at about 4%, but is expected to decline to around 3.25% by year-end, Williams said in remarks prepared for an event in New York.
Inflation should continue to cool and hit the Fed's 2% goal in 2028, he said. "There are encouraging reasons to expect that inflation has peaked and should edge down in coming quarters," Williams said.
One of the factors he cited was expectations around energy prices returning to pre-Iran war levels. "Based on oil prices today and futures market pricing into next year, it appears that prices for energy and related goods have likely peaked and will come down closer to levels seen before the initial closure of the Strait of Hormuz," Williams said. "Of course, this situation is fluid and subject to a great deal of uncertainty." Crude prices plunged in May and June, but have rallied this month as tensions between the US and.