Williams: U.S. Core Inflation Unlikely to See Major Shift

John Williams, president of the Federal Reserve Bank of New York, predicted that while there are inflationary pressures due to the conflict in Iran and other factors, U.S. core inflation, which excludes fluctuations in food and energy prices, will not see significant changes. In an interview with Bloomberg Television on the 7th, Williams stated, "The situation (for core inflation) has not changed much," and projected that the core inflation rate would be limited to around 0.1-0.2 percentage points. However, he forecast that the overall inflation rate, encompassing all goods and services, would rise higher.

Core inflation is a key indicator the Federal Reserve uses for monetary policy decisions because it is relatively less affected by external variables such as shocks from conflicts or oil prices, as it excludes food and energy, which are highly volatile.

Regarding the necessity of changing the benchmark interest rate, Williams stated that there is no reason to adjust it at this time. He assessed that the current monetary policy is in a very favorable position to observe the economic repercussions of the Middle East conflict, saying, "Monetary policy is exactly where it needs to be, and we can respond as circumstances change."