Federal Reserve Bank of New York President John Williams said Thursday that he sees lower risks to inflation as tariffs have driven up price pressures less than expected.

"I see on the margin...a reduction of some of the upside risks to inflation" from tariffs, Williams told reporters after speaking at the Economic Club of New York. He noted this reduction comes alongside greater clarity about future economic policy.

Williams acknowledged that President Donald Trump's import tax increases are "definitely" affecting price pressures, but added that in terms of tariff pass-throughs to higher inflation, "these effects seem to be at or below estimates of what that would be."

The New York Fed chief expressed satisfaction that tariffs have not yet caused persistent inflation, though he cautioned it might take longer to fully assess their impact on inflation data.

When asked about market expectations for a September rate cut, Williams declined to comment on whether those views were accurate.

Source: Investing.com