Fed's Williams' new economic forecast suggests recession is possible

Dow Jones2025-04-11

MW Fed's Williams' new economic forecast suggests recession is possible

New York Fed President John Williams on Friday said that the unemployment rate could rise from its current level of 4.2% to between 4.5%-5% over the next year given the combined effects of uncertainty and the increases in tariffs announced by the White House.

Although Williams did not mention a recession, embedded in his forecast is the possibility that the increase in unemployment could breach the Sahm rule.

While not a hard and fast rule, former Fed staffer Claudia Sahm highlighted a statistical regularity showing that an increase in unemployment of 50 basis points or more is typically followed by a larger increase in the unemployment rate and a recession.

-Greg Robb

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April 11, 2025 11:08 ET (15:08 GMT)

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