Fed’s Williams says inflation too high, targets 2 percent

John Williams, the president of the Federal Reserve Bank of New York, said Friday inflation remains too high amid multiple price shocks.

“Inflation is absolutely too ​high. It’s been too high for too long,” Williams said at a ​European Central Bank conference in Germany.

He later added, “It’s absolutely essential that we bring inflation back to our 2 percent target in a timely manner and a sustained ​basis.”

Inflation has remained above the Fed’s 2 percent goal for five and a half years, and it has risen this year amid the Iran war . The conflict has driven up energy prices in the U.S. given the Islamic Republic’s restrictions on shipping in the Strait of Hormuz.

Williams also acknowledged President Trump’s import tariffs and the AI build-out have put pressure on prices, saying the American economy has been “resilient” in the face of the shocks.

“We’ve seen resilience in economic growth and demand, and that’s also translated into a remarkably stable and solid labor market,” the New York Fed president added.

Unemployment has remained below 5 percent since September 2021, and employers added a better-than-expected 165,000 jobs in October, the Bureau of Labor Statistics reported Friday .

As the labor market remains on solid footing, and with inflation above the Fed’s target, central bank officials raised interest rates by a quarter point in September. Fed officials held rates steady last week, keeping the federal funds rate at a range of 3.75 percent to 4 percent.

The Federal Open Market Committee will gather again Dec. 8-9, with Fed Chair Kevin Warsh saying last week that holding rates would give officials time to evaluate incoming economic data.

Williams said Friday that officials must also consider where the economy is “likely to be” in the future, instead of looking backward.

“Monetary policy takes a year or two to have its full effect on the economy,” he said in Germany. “So we have to be very explicitly forward-looking, despite all the uncertainties, [and] thinking ahead.”