MNI: Fed's Williams Says More Rate Increases Likely Needed

The Federal Reserve likely needs to raise borrowing costs further in the face of persistently high inflation data and stronger-than-expected growth, New York Fed President John Williams said.

"Do we have more to do on monetary policy? I think the incoming data support that hypothesis," Williams said during a Q&A with the Central Bank Research Association.

U.S. inflation is declining gradually but remains too high for Federal Reserve officials’ comfort, he said Wednesday. “Inflation is far too high,” Williams said. “The number one focus of monetary policy is to restore price stability.”

Williams said he takes some umbrage in the decline in rental lease costs, which he hopes will trickle through to shelter components of broader inflation measures.

He said another reason to be hopeful is that consumers don’t appear to expect very high inflation in the future.

“Inflation expectations have been remarkably well-anchored, even in the shorter run,” he said, citing the New York Fed’s own surveys.

Minutes from the Fed's June meeting showed some officials wanted to hike rates in June despite the decision to pause, and that almost all members expect additional rate increases this year. (See MNI INTERVIEW-Excess Retirements Peak, Set To Recede-Fed Econ)