Speaking to the press after his prepared statements on Friday, Williams highlighted that the economy faces several possible scenarios due to the current uncertainty. He mentioned that the median forecasts released by officials earlier in the week appeared reasonable, showing slower growth, increased inflation, and higher unemployment expectations.

Williams expressed concern about the uncertainty surrounding the impact of rapid changes in immigration, trade, and fiscal policies on the economy. He stated that the current monetary policy stance is appropriate and positions the US central bank to respond effectively to changing conditions.

While some Fed officials argue that the central bank can overlook price shocks from tariffs if inflation expectations remain stable, Powell and other Fed officials emphasized the importance of maintaining stable long-term inflation expectations.

A survey from the University of Michigan revealed a rise in consumer expectations for inflation over the next five to 10 years, reaching 3.9%, the highest level in over three decades. This increase has raised concerns among investors and economists that the trade policies of the Trump administration could lead to a resurgence in inflation, prompting the Fed to keep interest rates higher for a longer period.

Williams affirmed during a conference in the Bahamas that there are no indications of inflation expectations deviating significantly from the pre-pandemic period. Both New York Fed President John Williams and Chicago Fed President Austan Goolsbee emphasized that the labor market and growth have been strong, and any inflationary impact from tariffs could be short-lived.

They shared similar views with Powell, who highlighted the need to keep long-term inflation expectations stable in a recent press conference. They all acknowledged the uncertainties in the current economic outlook and stressed the importance of monitoring the effects of tariffs, trade policies, and other changes.

The Fed officials reiterated that the current monetary policy stance is appropriate given the solid labor market and slightly above-target inflation. They also mentioned that the Fed is well-prepared to adjust to evolving circumstances affecting its dual mandate goals.

Goolsbee mentioned that the impact of tariffs could be temporary, similar to Powell's earlier statements, emphasizing that the Fed will carefully assess the situation. Fed officials are closely monitoring the developments in trade policies and their potential implications on inflation and economic growth.