Federal Reserve's Williams: Major central banks must be prepared for emergencies, stabilizing inflation expectations is crucial
Federal Reserve FOMC permanent voting member and New York Fed President John Williams stated that major central banks must be prepared to respond to unpredictable changes and emphasized the importance of stabilizing inflation expectations. He pointed out that the public's understanding of central bank policies would enhance the effectiveness of those policies and mentioned uncertainties that could arise from global demographic changes and artificial intelligence. Williams also noted that unconventional monetary policy tools, such as bond purchases, have become conventional tools
According to the Zhitong Finance APP, Federal Reserve FOMC permanent voting member and New York Fed President John Williams stated on Friday that unpredictable changes are inevitable, and central banks must be aware of this and develop corresponding strategies to address these situations. Williams made these remarks in a speech prepared for an event in Amsterdam but did not mention the outlook for U.S. monetary policy.
The Federal Reserve committee lowered interest rates last month as officials sought to offset risks facing the labor market. However, Williams emphasized that stabilizing inflation expectations is crucial and should not be overlooked. He also noted that policies are more effective when the public understands the central bank's actions.
Williams stated, "Unpredictable changes and uncertainties will certainly accompany us for the foreseeable future." He pointed out several issues, such as "the impact of ongoing global demographic changes, artificial intelligence, and innovative initiatives that could trigger significant changes in our financial system."
Williams indicated that addressing uncertainty means central banks need to establish sound principles and strategies to deal with various potential situations. He also noted that new circumstances will continue to arise. Williams further stated that previously unconventional strategies, such as bond purchases, are no longer novel but have become one of the standard tools
