Fed's Williams, Bullard Make It Clear Central Bank Means Business: 'Let's Be Sharp Now'

New York Federal Reserve Bank President John Williams said on Wednesday the central bank is absolutely committed to guiding inflation down to its 2% target over the next few years.

"Our job is clear: our job is to make sure we restore price stability, which is truly the foundation of a strong economy," Williams said at a conference hosted at the bank, according to a Reuters report.

Williams also observed that with global supply chains still disrupted, prices may not continue to fall and inflation in core services excluding housing continues to be far too high, as demand is relatively higher than supply.

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On Wednesday, minutes of the Federal Open Market Committee policy meeting stated that although participants agreed there were recent signs of inflationary pressures moderating, it remained well above the committee’s longer-run goal of 2% and that the labor market remained very tight, contributing to continuing upward pressures on wages and prices.

Major indices closed mixed following the release of the minutes. The SPDR S&P 500 ETF Trust SPY closed 0.14% lower while the Invesco QQQ Trust Series 1 QQQ closed 0.075% higher.

Bullard’s Remarks: St. Louis Federal Reserve President James Bullard said a relatively aggressive interest rate hike now would give the FOMC a better chance to rein in inflation.

“It has become popular to say, ‘Let’s slow down and feel our way to where we need to be.’ We still haven’t gotten to the point where the committee put the so-called terminal rate,” he told CNBC.

“Our risk now is inflation doesn’t come down and re-accelerates, and then what do you do? We are going to have to react, and if inflation doesn’t start to come down, you know, you risk this replay of the 1970s ... and you don’t want to get into that. Let’s be sharp now, let’s get inflation under control in 2023,” Bullard said.

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