By Ann Saphir
PALO ALTO, California (Reuters) -The U.S. main bank’s 2% target for inflation is secret to attaining cost stability and necessary for guaranteeing financial success, New York Federal Reserve Bank President John Williams stated on Friday.
His defense of the inflation target comes inthemiddleof consistent calls from some corners for the Fed to overhaul the method it guides, sets and interacts policy.
“Theory and experience have likewise revealed the value of openness and clear interaction, consistingof setting an specific, mathematical longer-run inflation target, and of taking suitable actions to assistance the accomplishment of that objective,” Williams informed a financial policy conference at Stanford University’s Hoover Institution. “These are vital in anchoring inflation expectations, which, in turn, aid keep inflation at the target.”
The Fed hasactually been fighting too-high inflation for more than 2 years, raising interest rates from near absolutelyno in March 2022 by more than 5 complete portion points, an aggressive rate n