Fed's Williams says it is to soon to gauge the impact of the war with Iran on US inflation and growth, but US economy is less dependent on imported oil than it has been and it has proved resilient to energy price shocks

• "Transmission is really through some of these asset prices and financial market reactions, which so far have been reasonably muted".
• The key is how much the Iran conflict influences each side of the mandate.
• Increased uncertainty may also have an impact.
• Oil prices do influence inflation, and that impact would change near-term inflation outlook. Will have to assess persistence.
• Fed is focused on the drift of lending outside the regulated sector, though he does not yet see it as a stability risk.
• Long term inflation expectations have been remarkably stable.
• Still feels Fed's policy rate is modestly above the neutral rate. 
• First order of reason to cut rates is to maintain a constant real rate as inflation falls. A second consideration is whether policy needs to be closer to neutral. 

Fed's Williams emphasizes that it's premature to assess the Iran conflict's impact on U.S. inflation and growth, but notes the economy's reduced dependence on imported oil. This suggests that while the immediate outlook is uncertain, long-term inflation expectations remain stable, possibly influencing future rate decisions as the Fed balances between maintaining a constant real rate and aligning policy closer to neutral.