Fed's Williams expects overall inflation to fall to about 3.25% by year-end and to continue moving toward the 2% target in 2027, reaching the target in 2028.

US Treasury yields rose in Wednesday Asian trading but remained below Tuesday's intraday highs after June CPI printed below market expectations, which had pushed yields down at Tuesday's close. Jamie Cox, managing partner at Harris Financial Group, said the report did not show runaway inflation and that the recent inflation uptick reflected mainly higher energy prices, an effect likely to be transient. Renewed escalation in US-Iran tensions remains a key source of market uncertainty.

Federal Reserve's Williams said he has no particular view on the policy direction.