Rob Kim
New York Federal Reserve Bank President John Williams underscored the importance of the U.S. central bank’s 2% inflation target on Friday, calling the Fed’s preferred policy tool an essential element in achieving price stability and economic prosperity.
His comments came at a monetary policy conference at Stanford University’s Hoover Institution, days after the U.S. Federal Reserve held its short-term borrowing costs steady, citing “a lack of further progress” toward its 2% inflation goal.
“Theory and experience have also shown the importance of transparency and clear communication, including setting an explicit, numerical longer-run inflation target and of taking appropriate actions to support the achievement of that goal,” Reuters reported, quoting Williams.
“These are critical in anchoring inflation expectations, which, in turn, help keep inflation at the target,” he added.
With the Fed deciding to ease the pace of quantitative tightening at its latest interest rate policy meeting, the benchmark S&P 500 (SP500) index closed 0.6% higher this week, marking its second straight weekly advance. Meanwhile, the blue-chip Dow (DJI) added +1.1%, and the tech-heavy Nasdaq Composite (COMP:IND) rose +1.4%.
