Federal Reserve official John Williams has offered fresh insights into the U.S. economic outlook, indicating that inflation pressures are expected to climb to a range of 2.75% to 3% in the first half of the year, marking the peak of the current cycle.
Inflation Trajectory Coming Into Focus
Williams emphasized that while price pressures remain, the overall trend is moving toward greater control. He noted that key inflation measures are showing signs of moderation and market expectations are stabilizing, providing more room for policy adjustments.
Positive Outlook for 2026
Looking ahead, Williams expressed confidence in the medium-term economic path. He described the 2026 outlook as 'quite favorable,' supported by a resilient labor market and steady consumer spending. He expects GDP growth to remain moderate and unemployment to stay at healthy levels.
- Inflation expected to peak mid-year and gradually decline
- Monetary policy nearing neutral territory
- Longer-term inflation expectations remain well-anchored
- Soft landing scenario gaining traction
Overall, Williams’ comments signal a cautious shift in tone. While short-term volatility remains a concern, policymakers appear increasingly confident in achieving both price stability and sustained growth.