In his outlook speech, NY Fed President John Williams sees the inflation fight getting bumpier. He says he now expects 3% inflation this year, and inflation returning to 2% in 2027. This suggests a somewhat higher path than he had just a few weeks ago (2.75%-3% in his April 16 outlook speech). A notable update to the outlook: In April, Williams described tariff effects as something that "should begin to wane" and create "downward momentum in core inflation." Today, he still expects current tariffs' pass-through to mostly complete in coming months, but he now explicitly anticipates "a new round of tariffs in the coming months, which would put additional upward pressure on import prices."(Nick Timiraos)