Fed’s Williams Says Policy Well Positioned Amid Supply Shock (1)

Federal Reserve Bank of New York President John Williams said interest rates were well positioned amid signs of significant supply chain disruptions due to war in the Middle East.

“The conflict in the Middle East could result in a large supply shock with pronounced effects” that both boost price pressures but also dampen economic activity, he said. “This has begun to play out already,” Williams added, pointing to disruptions in the supply of energy and related goods.

Yet Williams signaled the best response by the Fed, at least for now, was no response.

New York Fed President John Williams.

Photographer: Michael Nagle/Bloomberg

“The current stance of monetary policy ...