According to John Williams, how is the Middle East war already affecting U.S. inflation and consumer prices?

Williams stated that developments in the Middle East are 'driving significant increases in energy prices, which are already lifting overall inflation' and that this process 'has begun to play out already'; he cited mounting signs of supply chain disruptions and higher fuel costs already passing through 'in the form of higher airfares, groceries, fertilizer, and other consumer products.'

What does Williams project for U.S. inflation and unemployment in 2025, and what is his stance on the Fed’s policy response?

Williams projected inflation will rise to between 2.75% and 3% this year before retreating to the 2% target in 2027, and unemployment will be between 4.25% and 4.5% this year; he reiterated his 'unwavering commitment' to returning inflation to target and said Fed interest rate policy 'is well positioned to balance the risks to our maximum employment and price stability goals' amid an 'unusual set of circumstances.'

Fed's Williams Warns War Already Driving Up Inflation Pressures

Apr 16, 2026

New York Fed President John Williams stated that Middle East conflicts are increasing energy and fertilizer prices, lifting overall inflation. He forecasts inflation reaching 2.75%–3% this year before returning to targets in 2027.

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