New York Federal Reserve President John Williams said on Thursday evening that more interest rate increases are likely as the central bank works to lower high inflation in an otherwise healthy economy, Reuters reported. He did not say when he expects the next increase or how far rates will ultimately go.
“The economy is strong, labor market continues to strengthen, and inflation is persistent,” Williams said at the UC Berkeley Alumni Salon in New York. “We will need to take actions over time that will ensure that we get inflation back to our 2 percent goal in a timely manner and on a sustained basis,” he added, saying the Fed still has work to do to get monetary policy to the right place. Dow Jones reported the same remarks, including his line that the data is speaking very clearly.
Williams also addressed the cost of living directly: monetary policy targets the rate of inflation, he said, not the absolute level of prices, so the Fed cannot lower prices that have already risen. Financial markets broadly expect a quarter point increase in the current 3.75 to 4.00 percent federal funds target range at the December meeting and a further increase in January, Reuters noted, with an active debate about more aggressive action after Governor Christopher Waller earlier said a 0.3 percent core inflation reading would put a 50 basis point December hike on the table. October core CPI rose exactly 0.3 percent, for a third straight month.