The central bank will have to continue adjusting its policy approach because price growth remains above its long-term stability goal, New York Fed President John Williams said. He stated that current inflation is too high and that the Fed still has work to do to establish the correct monetary policy stance to ensure that inflation returns to the 2% target on a sustained basis.
Williams noted that the Fed’s framework focuses on controlling the rate of inflation rather than trying to reverse changes in absolute price levels. He cautioned that attempting to force overall prices lower would risk creating economic instability and lead to poor economic conditions.
