US Fed’s John Williams says inflation ‘far too high’

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Federal Reserve Bank of New York President John Williams stated that US inflation remains high, requiring further policy action to reach the 2% goal while preserving maximum…

Federal Reserve Bank of New York President John Williams said US inflation remains high and policymakers must take further action to contain price pressures.

“Inflation is far too high and it continues to be high even in the latest data,” Williams said Thursday evening at an event in New York. “We’ll need to take actions over time that will ensure that we get inflation back to our 2% goal promptly and on a sustained basis.”

At the same time, he said the Fed must be “making sure that we don’t do undue harm to our maximum employment mandate.” Williams also said that overall, the economy doesn’t seem out of balance.

After delivering its first interest-rate hike in three years in September, the Fed held rates last month to await clearer economic data. Since then, officials have signalled broad agreement that rates need to rise to address elevated inflation, but they differ on the appropriate pace.

Some officials, like Philadelphia Fed President Anna Paulson, said this week that “further gradual tightening seems appropriate.” But Fed Governor Christoper Waller opened the door to a larger, half-percentage-point hike as early as next month if inflation data for October came in hotter than expected — which it did, shortly after he spoke.

Williams said that the Fed had agreed in September to assess forthcoming data to get a “clearer picture of what’s going on” and then make a determination on policy at the next meeting. “We’ll continue to do that process,” he said.

“I feel that the data is speaking very clearly to us — the economy is strong, labour market continues to strengthen, and inflation is persistent,” he said. “We still have work to do in terms of getting monetary policy to the right place.”

Tuesday’s inflation report showed underlying consumer prices, excluding food and energy costs, rose by 0.3% in October from the prior month — topping estimates for a third straight month. Chicago Fed President Austan Goolsbee called the data “borderline disturbing.”

Interest-rate…

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