Fed's Williams Says Inflation Still Too High for 2%

New York Fed President John Williams said Friday that U.S. inflation is "absolutely too high" and that it is "absolutely essential" to bring it back to the Fed's 2% target "in a timely manner and a sustained basis," Reuters reported from an ECB conference in Frankfurt.

Williams also said U.S. growth has remained resilient and the labor market is "remarkably stable" despite successive shocks, according to the same Reuters dispatch carried by The Standard.

What he tied to higher prices

Reuters said global inflation has risen mainly as the U.S. war on Iran pushed energy prices higher, and as heavy AI investment lifted costs for some IT-related goods and services. Williams argued the Fed should focus on where inflation is heading and keep current shocks from becoming broader or more persistent.

"Fortunately, we're not seeing that happen so far in terms of inflation expectations, which remain well anchored," he said, per Reuters. He also said wage growth looks consistent with the 2% goal.

How Fed talk lands for crypto

The Federal Reserve's policy rate sets the cost of short-term dollar funding. Higher rates, or the chance of another hike, can make non-yielding assets such as bitcoin less attractive next to cash and Treasuries. Williams did not say what the next rate move should be. He said the Fed's last policy statement correctly concluded it was appropriate to collect more information before judging the stance of policy.

Reuters said financial markets see more than a 50% chance of a rate hike by December, with a move by March fully priced in.

Bitcoin was about $76,050 around 6 a.m. ET Friday, down roughly 5.2% over 24 hours, per CoinGecko.

In our opinion: Williams left the next rate move open and stuck to the data pause. Reuters' December hike odds above 50% put the next checkable event on the Fed calendar. Bitcoin was already about 5% lower over 24 hours before that Frankfurt speech landed.