Key facts
- Williams said inflation is "absolutely too high" and has been too high for too long.
- He said it is essential to bring inflation back to the 2% target in a timely and sustained way.
- Williams said inflation expectations remain well anchored and wage growth is consistent with the 2% goal.
- He said the Fed's last policy statement correctly called for collecting more information on the policy stance.
New York Federal Reserve President John Williams said on November 6 that US inflation is too high and must be brought back to the central bank's 2% target, speaking at a European Central Bank conference in Frankfurt.
"Inflation is absolutely too high. It's been too high for too long," Williams said, adding that it is "absolutely essential that we bring inflation back to our 2% target in a timely manner and a sustained basis." He said US economic growth has remained resilient and the labor market is remarkably stable despite successive shocks.
Williams said the Fed's key focus should be where inflation is heading and making sure current shocks do not translate into broader or more persistent inflation. He said inflation expectations remain well anchored and wage growth is consistent with the 2% goal.
Williams did not discuss what the Fed's next policy move should be. He said the bank's last policy statement had correctly concluded it was appropriate for the Fed to collect more information to determine the appropriate stance of policy.
The report said inflation has risen across the world, mostly because the US war on Iran has pushed energy prices higher and also because investment in AI has pushed up costs for some IT-related products and services. Financial markets see a more than 50% chance of a rate hike by the Fed in December, while a move by March is fully priced in, according to the report.