Williams Fed said the central bank must prepare for the unexpected

Federal President Reserve Bank of New York John Williams said on Friday that unpredictable changes cannot be avoided and central banks need to realize this and have a strategy to operate in that environment.

Williams’s comment, who came in the remarks prepared for an event in Amsterdam, did not discuss the prospects of the US monetary policy. Williams served as Deputy Chairperson of the Federal Open Market Committee who set tariffs, which cut interest rates last month when officials tried to compensate for rising risk to the job market.

“Changes and uncertainty that cannot be predicted will certainly continue with us in the future,” Williams said, marking problems such as the “effects of ongoing global demographic shifts, artificial intelligence, and potentially transformative innovations in our financial system.”

Williams said dealing with uncertainty means that the central bank requires strong principles and strategies in a place that can handle various possibilities, while noting there will still be a new situation to be handled. Williams also said that previously unconventional strategies such as bond purchases were no longer new and were a normal part of the toolkit.

Williams said that the inflation expectations were very important and unacceptable.
Source: Reuters