New York Fed head says inflation uncertainty has increased

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.