“The thing you want to avoid is allowing inflation to become highly persistent, because highly persistent can kind of become permanent,” he said.
Federal Reserve Bank of New York President John Williams said pandemic-era price shocks changed American consumers’ inflation perceptions, and policymakers can’t take for granted that people’s estimates of future price increases will remain anchored.
“The past five years have, I think, changed people’s perceptions of inflation,” Williams said Wednesday in Tokyo during a conference at the Bank of Japan. Policymakers should aim to anchor not only longer-term estimates of future consumer price increases, but “the whole curve”, he added.
