NEW YORK CITY — John Williams, President of the Federal Reserve Bank of New York, stated on July 9, 2026, that he does not expect a sustained rise in energy prices over the remainder of the year. He expects energy prices to peak before declining, which he said would reduce inflationary pressure.

Williams noted that financial markets project a decrease in oil prices over the next six to 12 months. "The markets still expect oil prices to come down over the next six to 12 months. I think that's a pretty reasonable baseline," Williams said. He added, "I still feel kind of the fundamentals are that energy prices are likely to be around their peak and then to come down over time."

Williams discussed the Federal Open Market Committee (FOMC) meeting scheduled for July 28-29, 2026. He indicated that the Federal Reserve had not yet begun analyzing recent events to formulate its response for the upcoming meeting. "We haven't even started the process of doing an analysis," he said, referring to the Fed's evaluation of recent developments. He also emphasized the regular cycle of monetary policy decisions. "We meet every six weeks. This isn't like we're making decisions forever," he stated.

Meeting minutes from the central bank's mid-June monetary policy gathering were released on July 8, 2026. At that mid-June meeting, Federal Reserve officials maintained their interest rate target range between 3.5% and 3.75%. Forecasts issued during that meeting indicated that officials had projected rate increases for the year.

Williams had previously expressed growing optimism on July 7, 2026, that overall high inflation levels would ease due to falling energy prices, an outlook he shared in a television interview. Regarding the Federal Reserve's balance sheet, which holds approximately $6.7 trillion, Williams commented on its purpose. "I don't think the driver of this should be focused on the amount of Fed balance sheet reduction that can be achieved," he said. He further explained, "It really should be how do we improve and make and strengthen our financial system."

Why It Matters

John Williams' statements provide insight into the Federal Reserve's current economic outlook concerning inflation and its potential impact on future monetary policy decisions. His expectation that energy prices will decline could influence the Fed's approach to interest rates and its balance sheet, which is a key component of the financial system. The upcoming FOMC meeting will be the next opportunity for officials to adjust policy based on evolving economic conditions, including recent developments in energy prices and global events like the restarted hostilities in the Middle East.