Fed's Williams: Inflation expectations have come down quite a bit

Federal Reserve Bank of New York President John Williams said Wednesday that inflation expectations have come down quite a bit, and that the central bank needs to take that into account when setting policy.

Williams said in a speech to the Economic Club of New York that the Fed's 2% inflation target is "not a ceiling" and that the central bank needs to be flexible in its approach to achieving that goal.

"Inflation expectations have come down quite a bit, and that's something we need to take into account in setting policy," Williams said. "We need to be very mindful of the fact that inflation expectations have come down, and we need to be very flexible in our approach to achieving our 2% inflation target."

Williams' comments come as the Fed is widely expected to raise interest rates later this month for the first time since 2018. The central bank has been under pressure to tighten monetary policy in response to rising inflation, but Williams' remarks suggest that the Fed may take a more cautious approach.

"We need to be very mindful of the fact that inflation expectations have come down, and we need to be very flexible in our approach to achieving our 2% inflation target," Williams said. "We need to be very flexible in our approach to achieving our 2% inflation target."