Federal Reserve (Fed) Bank of New York President John Williams said on Thursday that the path for monetary policy depends on data, outlook and risks, per Reuters.

Key takeaways

"Some of US productivity rise predates rise of AI."

"US dynamism is behind rise in productivity."

"AI will have lasting impact on productivity."

"We have a solid economy, the underlying labor market is doing well."

"Middle East war impacts consumer spending amid higher energy costs."

"US is less sensitive to oil shocks compared to history."

"Middle East war is boosting inflation, energy surge should have short impact."

"Hit to inflation likely to peak in next few months."

"Tariff impact should peak in next few months."

"Near term, inflation around 4% and core inflation around 3%."

"Anchoring inflation expectations is critical."

"Seeing elevated near-term inflation expectations but long-term stable."

"Supply chain disruptions are a concern and they are happening due to war."

"Persistently high inflation would call for higher rates, not where we are today."

Market reaction

These comments don't seem to be having a noticeable impact on the US Dollar's (USD) action. At the time of press, the USD Index was virtually unchanged on the day at 99.20.