New York Fed President John Williams emphasized the importance of acting decisively to prevent inflation from becoming entrenched, warning that delayed responses risk making price pressures permanent.
Speaking at a conference in Tokyo, Williams noted, “you want to avoid inflation becoming highly persistent because that could become permanent”.
“And the way to do that is to respond relatively strongly” when inflation begins to deviate from target.
He also highlighted the sensitivity of inflation expectations, cautioning that any significant shift could be “detrimental” to economic stability.
