John C. Williams, President of the Federal Reserve Bank of New York and Vice Chair of the Federal Open Market Committee (FOMC), who holds a permanent voting seat on the committee in 2026 because the New York Fed president always votes, warned that inflation remains stubbornly persistent and elevated.

He spoke Thursday evening at a UC Berkeley alumni event in New York, two days after October CPI came in hotter than forecast. The Fed delivered its first rate increase in three years in September and held steady in October, and it meets again Dec. 9.

Williams made clear the job is unfinished. The Fed will have to act over time to return inflation to 2%, and it still has work to do to get monetary policy to the right place. He wants that action to avoid harming the labor market. He also set a limit on the goal. Monetary policy targets inflation, not price levels, he stressed, and trying to push overall prices lower can create poor economic conditions.

On the economy, Williams struck a steadier tone. The US economy is getting stronger without overheating, he said. It has been resilient, growth has stayed strong, and the overall economy doesn’t seem out of balance.

Looking further out, he said the US has the economic means to address its debt levels but needs the political will to do it. He also flagged that the US economy is vulnerable to a change in enthusiasm for AI.

Key Quotes:

Inflation

  • Inflation remains stubbornly persistent and elevated

  • Monetary policy targets inflation, not price levels

  • Trying to lower overall price levels can create poor economic conditions

Monetary Policy

  • Fed will need to act over time to return inflation to 2%

  • Fed still has work to do to get monetary policy to the right place

  • Need to take action while avoiding harm to labor market

  • Fed has been collecting data at a steady pace

Growth & Economy

  • US economy getting stronger without overheating

  • Economy has been resilient and growth strong

  • Overall economy doesn’t seem out of balance

Fiscal Policy & Debt

  • US has the economic means to address debt levels; political will is needed

AI & Productivity

  • US economy vulnerable to changes in enthusiasm for AI