The president of the Federal Reserve Bank of New York announced Thursday that he believes current interest rate policy should remain unchanged, even as Middle East conflicts create economic uncertainty.
Speaking at a New York event, the central bank official described monetary policy as being in a “good place” currently.
“I don’t see there’s any reason at all to raise rates right now or lower rates right now,” the Fed leader stated.
The remarks came during an address to the Conference of Business Economists, where the official largely repeated positions he has outlined in recent public statements.
The central banker emphasized the importance of maintaining stable inflation expectations, noting that while short-term forecasts have increased, longer-term projections remain steady, which he characterized as positive.
Regarding tariff impacts on inflation, the official said he believes most effects have already occurred, though he continues monitoring price pressure developments.
“We’re not seeing…unusual second-round effects or persistent effects. But we just have to keep watching,” he explained, citing stable inflation expectations and a job market that isn’t driving up price pressures.
The Fed official also addressed current stock market strength, saying it aligns with investor sentiment about economic prospects.
“There is optimism about higher productivity growth going forward, partly AI and other things,” he noted. “It’s not surprising that the stock market’s high” given how “bullish” people are about the future of the economy.
Market watchers currently anticipate the federal funds target rate will remain in its current 3.5% to 3.75% range in coming months.
While the Middle East conflict has triggered price pressure increases, the duration of these effects remains uncertain due to the ongoing nature of the situation.
