Key facts
- New York Fed President John Williams expects energy prices to decline over the next six to 12 months.
- Williams stated the Fed has not yet begun analyzing potential responses to recent events.
- Banking system stability should be the priority for any Fed toolkit changes.
- Japan's wholesale prices in June surged 7.1% year-on-year, accelerating from May.
- The yen-based import price index rose 29.7% year-on-year in June.
New York Fed President John Williams expressed optimism that energy prices will decline over the next six to 12 months, despite renewed conflict in the Middle East. He believes market fundamentals support this view, even as renewed attacks threaten energy flows. Williams stated the Fed has not yet begun analyzing potential responses to recent events, emphasizing a data-dependent approach. He also highlighted banking system stability as a priority for any changes to the Fed's interest rate toolkit. Meanwhile, European Central Bank policymakers project inflation to remain above target into 2027, despite nearly three anticipated interest rate hikes. The Bank of Japan maintained its economic assessment for all regions, noting a diminished impact from the Middle East conflict on exports and output. Separately, Japan's wholesale prices in June surged 7.1% from a year earlier, accelerating from the previous month and exceeding market forecasts, driven by higher energy costs and a weaker yen. The yen-based import price index also accelerated its rise.