New York Fed President John Williams has warned that the ongoing conflict in Iran could lead to significant increases in oil prices, impacting various sectors of the U.S. economy. Speaking on FOX Business, Williams highlighted that the rise in energy costs could elevate prices for goods and services, such as airline tickets, due to higher fuel expenses. This economic transmission typically unfolds over several months to a year. The national average price of regular gasoline in the U.S. has already surpassed $4 per gallon, marking an increase of over $1 since the conflict began on February 28. Williams noted that these rising energy prices are contributing to inflation and reducing household disposable income, thereby exerting dual pressure on economic demand. While the Federal Reserve's current monetary policy is designed to manage such risks, Williams acknowledged the limitations of monetary policy in addressing oil price shocks, emphasizing the need for forward-looking decisions as the full effects of policy measures take time to materialize.