Fed's Williams (voter) thinks Iran will go directly into headline inflation given energy; inflation this year should be around 2.75%

Inflation:

• Focused on underlying inflation.
• Story on core inflation has not changed that much.
• Tariffs remain a big part of the inflation story.
• Monpol takes about a year to have its full effect on inflation, so have to try and think through where inflation and economy will be later.
• Expects underlying inflation to start coming down later this year.

Path Ahead:

• Reiterates monetary policy is well positioned to wait and see.
• Monpol is exactly where it needs to be and can be changed if needed.

Labour Market:

• Expects 2-2.5% GDP this year with stable unemployment rate.
• Labour market situation is pretty complicated.
• Job market is low hire and low fire.
• To his mind, the labour market is not factors pushing up inflation and at a good place with that.

Economy:

• US economy is remarkably resilient and tech broadly helping productivity levels.
• Compensation growing consistent with productivity, and not pressuring inflation.
• Businesses have been adapting to a more uncertain world.
• Seeing positive job growth, and an economy that continues to grow and invest.
• Low hire, low fire economy, and low unemployment rate.

Warsh/Fed:

• No issue at continuity at Fed.
• Fed is focused on work and leadership concerns are not an issue.
• If Warsh not confirmed swiftly, FOMC will be business as usual. Note, next FOMC is set to be Powell's last as Chair.
• Warsh understands Fed very well.
• Have not spoken to with Warsh 'lately'.
• When people come into Fed, understand importance of the mission.
• Up to Powell if he wants to serve out Governor term.