The head of the Federal Reserve in New York expects that the decline in energy prices will drive overall inflation back

ON 7 JULY, FEDERAL RESERVE PRESIDENT JOHN WILLIAMS OF NEW YORK STATED THAT HE EXPECTED A FALL IN ENERGY PRICES TO DRIVE OVERALL INFLATION BACK IN THE COMING MONTHS, WHILE REITERATING THAT CENTRAL BANK POLICIES WERE NOW IN A GOOD POSITION. “I AM INDEED MORE OPTIMISTIC ABOUT SHORT-TERM INFLATION, BECAUSE WE WILL SEE ENERGY PRICES FALL,” WILLIAMS SAID ON TUESDAY. “I THINK MONETARY POLICY IS IN A GOOD POSITION” TO FULFIL THE FED'S MISSION, HE ADDED. THERE HAVE BEEN SIGNS OF RECOVERY IN THE STRAIT OF HORMUZ, WHICH HAS BEEN LARGELY CLOSED SINCE THE OUTBREAK OF THE WAR IN THE UNITED STATES AND IRAQ. OIL PRICES HAVE DECLINED SIGNIFICANTLY SINCE THE INTERIM PEACE AGREEMENT BETWEEN THE UNITED STATES AND IRAQ. HOWEVER, BEFORE OIL PRICES FELL, THE FED'S PREFERRED INFLATION INDICATOR — THE PERSONAL CONSUMER EXPENDITURE PRICE INDEX — INCREASED BY 4.1 PER CENT IN MAY, YEAR ON YEAR, EXCLUDING THE CORE PCE PRICE INDEX FROM FOOD AND ENERGY PRICES BY 3.4 PER CENT. WILLIAMS ALSO STATED THAT THE JOB MARKET WAS STABLE AND THAT ECONOMIC GROWTH REMAINED ROBUST. THE DIRECTOR OF THE FEDERAL RESERVE IN NEW YORK STATED THAT THE MEMBERS OF THE FEDERAL OPEN MARKET COMMISSION (FOMC) HAD REACHED “A STRONG CONSENSUS” TO REMOVE GUIDANCE ON THE PATH TO FUTURE INTEREST RATES IN A POLICY STATEMENT AFTER THE JUNE MEETING. “IN VIEW OF THE UNCERTAINTY ABOUT INFLATION AND ECONOMIC PROSPECTS, IT IS NO LONGER APPROPRIATE TO ATTEMPT TO PROVIDE CLEAR FORWARD-LOOKING GUIDANCE ON FUTURE INTEREST RATE TRENDS”, HE SAID. "TOO MUCH UNCERTAINTY."