ablokhin
John Williams, president of New York Federal Reserve Bank, said more time was needed for the central bank to reach its 2% inflation goal, even as significant progress has been made in bringing the rate down to around 2.5%.
“We still have a way to go to reach our 2% target on a sustained basis. We are committed to getting the job done,” Williams said at a Reserve Bank of India event in Mumbai on Friday.
Williams said uncertainty will continue to be the defining characteristic of the monetary policy landscape for the foreseeable future.
“Despite the very best efforts of economists to understand how the economic environment is changing and what it means for monetary policy, we must accept that uncertainty will continue to define the future.”
At a separate event on Wednesday, Williams noted that r-star, or the neutral interest rate at which monetary policy is neither contractionary nor expansionary, doesn’t appear to have risen much and remains highly uncertain.
“The high degree of uncertainty means that one should not overly rely on estimates of r-star in determining the appropriate setting of monetary policy at a given point in time,” he said during a European Central Bank conference in Portugal.