WASHINGTON — Dr. John C. Williams, president and CEO of the Federal Reserve Bank of New York and former president and CEO of the Federal Home Loan Bank of San Francisco, said the Federal Reserve is continuing to focus on its dual mandate of maximum employment and price stability amid signs of uneven economic conditions.
Speaking at the Governmental Affairs Conference hosted by America’s Credit Unions in Washington, Williams first offered the required legal disclaimer that his remarks reflected his own views and not necessarily those of the broader Federal Reserve System.
“I learned the value of saving at an early age, so I am also proud to say that I’m a lifetime credit union member,” Williams told the audience.
Williams said that as head of the New York Fed, he oversees an organization responsible for implementing monetary policy and supporting the stability of the U.S. financial system. He framed his remarks around the Fed’s dual mandate, describing maximum employment and price stability as “two sides of the same coin.”
Bifurcated Consumers
On the consumer side of the economy, Williams said higher-income households have generally been supported by rising incomes and accumulated savings, allowing them to maintain spending. In contrast, lower-income households are showing signs of financial strain.
A recent analysis by the New York Fed found mortgage delinquency rates have risen and are most pronounced among borrowers living in lower-income counties with increasing unemployment rates, he said.
Turning to employment, Williams said that despite solid economic growth in 2025, the labor market gradually softened through much of the year. In recent months, however, there have been signs of stabilization.
After edging up over much of 2025, the unemployment rate, which reached 4.3% in January, has since declined to levels last seen in July 2025, he said. The New York Fed’s Labor Market Tightness Index, which measures how difficult it is for firms to find workers, has also stabilized.
Unusual Labor Market
Even with those improvements, Williams described the current labor market as unusual, characterized by both low hiring and low firing rates. The subdued pace of hiring, combined with a rise in longer-term unemployment, may be contributing to more pessimistic household perceptions than other labor indicators would suggest.
Survey-based measures of labor market sentiment, including those produced by The Conference Board and the New York Fed’s Survey of Consumer Expectations, have not yet reflected the same stabilization seen in other data, Williams said. He called those readings a “cautionary signal” that he will continue to monitor.
On price stability, Williams said tariffs have been a major focus over the past year. Based on current data, he said, tariffs have largely been borne domestically and have meaningfully increased U.S. prices on imported goods.
“The full effect will likely not be known for some time,” Williams said, adding that incoming data have helped sharpen the Fed’s understanding of the likely impacts.
The Role of Credit Unions
Williams also emphasized the importance of credit unions to their communities, particularly in serving populations that might otherwise be underserved. While the Federal Reserve does not regulate or supervise credit unions, he noted that credit union CEOs serve on community depository institution advisory councils at each of the 12 regional Federal Reserve banks, providing valuable insight into local economic conditions.
Their perspectives, he said, help inform policymakers and provide real-world context to economic data as the Fed works to balance its employment and inflation goals.
