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NY Fed chief: Inflation peaked at 4%, 2% by 2028

7/16/2026

Summary

Williams Predicts Inflation

John Williams, president of the Federal Reserve Bank of New York, said inflation has likely peaked at about 4%, well above the Fed’s 2% goal.
Williams expects inflation to fall to about 3.25% by end-2026 and to 2% by 2028.
He cited tariffs, supply-chain issues, Middle-East war energy spikes and AI investment as drivers, noting that tariffs have faded, shelter costs fell, oil likely peaked and AI imbalances will ease.

Summary

Warsh Warns Inflation

The June Consumer Price Index (CPI) fell 0.4% month-over-month, lowering inflation to 3.5%, the sharpest decline since April 2020.
Federal Reserve (Fed) Chairman Kevin Warsh testified before the House Financial Services Committee and rejected the ‘mission accomplished’ view.
Warsh called inflation a tax on Americans and businesses and said ending it requires a regime-change.
His caution contrasted with New York Fed President John Williams’s more optimistic assessment that inflation has peaked.

History

Historical Context

When President Carter named Paul Volcker Fed chair in August 1979, he lifted the federal funds rate to a 17.6% peak by April 1980, launching the “Volcker shock” that eventually curbed inflation and triggered the early-1980s recession. New York Fed President John Williams and former chair Kevin Warsh now cite that episode as a guide for the 2024 drive toward the Fed’s inflation goal.

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Williams Predicts Inflation

John Williams, president of the Federal Reserve Bank of New York, said inflation has likely peaked at about 4%, well above the Fed’s 2% goal.
Williams expects inflation to fall to about 3.25% by end-2026 and to 2% by 2028.
He cited tariffs, supply-chain issues, Middle-East war energy spikes and AI investment as drivers, noting that tariffs have faded, shelter costs fell, oil likely peaked and AI imbalances will ease.

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