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Federal Reserve Bank of New York President John Williams on tariff clarity, future rate decisions and U.S. economic growth trajectory in an exclusive interview with FOX Business’ Edward Lawrence.
The Federal Reserve, like the rest of the world, is keeping a close watch on President Trump’s trade and tariff policies — with one top official warning that, while the U.S. economy is in a “good place,” rising uncertainty is taking its toll.
“I talk to business leaders from small businesses, medium businesses, and global businesses. Uncertainty, and especially uncertainty around tariffs and trade policy, is the No. 1 topic,” Federal Reserve Bank of New York President John C. Williams told FOX Business’ Edward Lawrence in an exclusive interview on “Mornings with Maria,” Thursday.
“It’s very difficult, if you’re a business, to make long-term decisions on investment, new products and things like that,” he continued, “when you’re not quite sure what the environment will look like.”
The U.S. economy seems to be “pausing” on influential business and investment decisions, according to Williams, who noted that the Fed is also waiting for further “clarity” around global tariffs and trade restrictions.
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On Wednesday, investors stepped up their selling of U.S. stocks after Fed Chairman Jerome Powell said policymakers will stand down on any rate moves, mainly because President Trump’s tariffs are, in his view, larger than expected.
Will the Federal Reserve put a pause on rate cuts in 2025? New York President John Williams chimes in. (Getty Images)
“As that great Chicagoan Ferris Bueller once noted, ‘Life moves pretty fast.’ For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance,” he said in prepared remarks at the Economic Club of Chicago.
“My view is with the 2% inflation, which we’ll get back to, and then [the] view of the longer run, kind of the neutral real rate, is probably somewhere around 3 quarters of a percent, or some plus or minus that,” Williams clarified with Lawrence.
Osaic chief market strategist Phil Blancato discusses the Fed’s interest rate plans and the impact of tariffs on inflation on ‘Making Money.’
“Based on the latest data we have, it looks like inflation is running [at] about 2.3 percent. And you know, the economy grew very nicely last year,” he expanded. “From my point of view, I think monetary policy is well positioned. I don’t see any need to change the setting of the Fed funds rate anytime soon.”
Still, economic unpredictability could throw a wrench in the Fed’s plans.
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“There’s just a lot of uncertainty about how the economy is going to play out this year,” Williams said. “What we’re seeing in market pricing is a reflection of the uncertainty about the economic outlook and what’s going to happen in inflation.”
“We will definitely get effects on prices and inflation this year from tariffs. That’s what we’ve seen in the past. I think that’s a pretty conventional view on how this will play out. I think the big unanswered question is, to what extent does the inflation remain high, say, in 2026 or even longer? We need to make sure that any one-time changes in prices don’t pass through into more persistent higher inflation,” the Fed president emphasized.
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FOX Business’ Suzanne O’Halloran contributed to this report.
