Fed’s Williams: Persistent supply shocks cannot be ignored

New York Federal Reserve (Fed) Bank John Willams said in a panel discussion at Oxford University on Friday that although tariffs and higher energy prices don’t to a sustainable inflation. However, repeated supply shocks are keeping price pressures higher.

Remarks

Can't ignore persistent supply shocks.

Labor market not a source of inflationary pressure.

Tariffs generally don't produce sustained inflation

Fed should ensure shocks don't become entrenched.

Not seeing productivity impact from AI yet.

Market reaction

The US Dollar Index (DXY) seems to have extended losses slightly after remarks from Fed's Williams. At presstime, the DXY is down 0.2% to near 101.05.