The president of the US Federal Reserve Bank of New York said Wednesday that inflation uncertainty has increased but that does not appear to be because of "unmoored" longer-run expectations as the Fed struggles with lowering record inflation.
"The importance of maintaining well-anchored inflation expectations is a bedrock principle of modern central banking, but its precise meaning and validation has been open to interpretation," John Williams said at a conference on Global Risk, Uncertainty, and Volatility held in Zurich, Switzerland.
"The news is mostly good—longer-run inflation expectations in the United States have remained remarkably stable at levels broadly consistent with the FOMC's longer-run goal," he said.
The New York Fed head has a voting right in the Federal Open Market Committee (FOMC), which has increased the Fed's benchmark interest rate a total of 375 basis points, or 3.75%, since March to tame inflation that is still hovering above 8% -- its highest in four decades.
Fed raised interest rates by 75 basis points on Nov. 2 for a fourth consecutive time, raising the target range for the federal funds rate to between 3.75% and 4% -- its highest since January 2008.
