The "Three Musketeers" of the Federal Reserve: There is still a way to go to sustainably achieve the 2% inflation target
Dubbed the "third in command of the Federal Reserve" and enjoying permanent voting rights in the FOMC, New York Fed President Williams stated that more time is needed to achieve the 2% inflation target, despite significant progress in bringing the inflation rate down to around 2.5%. Williams said on Friday, "To sustain the 2% target, we still have a long way to go. We are committed to getting this job done." He noted that uncertainty will remain a defining feature of the monetary policy landscape in the foreseeable future. "Despite economists' best efforts to understand how the economic environment is changing and what that means for monetary policy, we must accept that uncertainty will continue to shape the future." At another event on Wednesday, Williams pointed out that the neutral interest rate (the rate at which monetary policy is neither tight nor loose) does not seem to have risen significantly and remains highly uncertain. Speaking at a meeting held by the European Central Bank in Portugal, he said, "High uncertainty means that when determining the appropriate monetary policy setting at a specific point in time, one should not overly rely on estimates of the neutral interest rate."
According to the Zhitong Finance and Economics APP, John Williams, the President of the Federal Reserve Bank of New York, known as one of the "three key figures of the Federal Reserve" and enjoying permanent voting rights in the FOMC, stated that more time is needed to achieve the 2% inflation target, despite significant progress in reducing the inflation rate to around 2.5%.
Williams stated on Friday, "To consistently achieve the 2% target, we still have a long way to go. We are committed to completing this task."
He mentioned that uncertainty will remain a decisive feature of the monetary policy landscape in the foreseeable future.
"Despite economists' best efforts to understand how the economic environment is changing and what this means for monetary policy, we must accept that uncertainty will continue to shape the future."
At another event on Wednesday, Williams pointed out that the neutral interest rate (the interest rate at which monetary policy is neither restrictive nor expansionary) does not seem to have risen significantly and remains highly uncertain.
Speaking at a meeting held by the European Central Bank in Portugal, he said, "High uncertainty means that when determining the appropriate monetary policy setting at a specific point in time, one should not overly rely on estimates of the neutral interest rate."