US inflation is too high and must return to 2%, Fed's Williams says
TLT•TLT•TLT•TLT•New York Fed President John Williams said US inflation is too high and must return to the Fed’s 2% target, while economic growth remains resilient and the labour market stable. Markets see more than a 50% chance of a Fed rate hike in December, with a move by March fully priced in.
Williams said US economic growth had remained resilient and the labour market was remarkably stable despite successive shocks. He said inflation was “absolutely too high” and that returning it to the Fed’s 2% target in a timely and sustained manner was essential.
Williams said the Fed should focus on where inflation is heading and ensure current shocks do not lead to broader or more persistent inflation. He said inflation expectations remained well anchored and wage growth was consistent with the 2% goal. He also said the Fed’s last policy statement was right to call for more information before determining the appropriate policy stance.
