CNBC Interview with New York Fed President John Williams on 2025 U.S. Economy, CPI, and Interest Rates

This report is based on the live CNBC “Squawk Box” interview with New York Fed President John Williams on December 19, 2025 [8], set against the backdrop of critical economic developments:

1. November 2025 CPI Distortion
   : The 43-day government shutdown disrupted BLS data collection, leading to the cancellation of the October CPI report and a November CPI reading of 2.7% YoY (below the 3.1% consensus) with no month-over-month data. Economists noted technical workarounds may have understated inflation [1][2][3][4][5], and Fed Chair Jerome Powell previously warned against over-reliance on shutdown-impacted data [2][4].
2. Recent Fed Action
   : The Fed cut the federal funds rate by 0.25% in December 2025, marking the third cut of the year, bringing the target range to 3.5%-3.75% [6].
3. Williams’ Influence
   : As a permanent FOMC voting member, his perspectives carry significant weight in shaping monetary policy.

Williams is expected to address how the FOMC is adjusting its analysis to account for data gaps, the sustainability of inflation progress toward the 2% target, and the 2026 interest rate outlook (where markets price in two cuts versus the Fed’s dot plot projection of one) [6].

1. Data Distortion as a Policy Challenge
   : The shutdown-induced CPI gaps force the Fed to balance traditional economic indicators with alternative data sources, highlighting the limitations of government data reliability during fiscal disruptions.
2. Williams’ Comments as a Market Catalyst
   : Given his FOMC position, even subtle shifts in tone could narrow the gap between market and Fed rate expectations, impacting equity valuations and borrowing costs.
3. Fed Credibility at Stake
   : The interview presents an opportunity to reassure stakeholders that the Fed’s inflation target remains unwavering despite incomplete data, a critical factor in maintaining public trust.

• Market Volatility
  : A cautionary tone (emphasizing data distortion and slower rate cuts) could trigger sell-offs in equities, which have priced in aggressive easing [6].
• Fed Credibility Pressure
  : Failure to clearly explain data interpretation methods may erode confidence in the central bank’s decision-making process.

• Clarity on 2026 Rate Path
  : Williams could provide guidance that aligns market and Fed expectations, reducing future volatility.
• Alternative Data Validation
  : His comments may validate the use of private-sector inflation trackers, offering new insights into economic trends during data disruptions.

Metric	Details	Source(s)
Interview Date/Time	2025-12-19 09:38:22 EST	[8]
Interviewee	John Williams, New York Fed President	[8]
November CPI (YoY)	2.7% (distorted due to shutdown)	[1][2][3][4][5]
Current Fed Funds Rate	3.5%-3.75%	[6]
2025 Rate Cuts	3 (cumulative 0.75%)	[6]
Market vs. Fed 2026 Cut Expectations	2 vs. 1	[6]

: No interview transcript/quotes are available yet (interview is live); Williams’ specific views on CPI distortion, inflation trajectory, labor market details, and balance sheet policy remain unknown.