Fed's John Williams, the President of the Federal Reserve Bank of New York, stated that the US central bank must remain dedicated to its 2% inflation goal. He highlighted that monetary policy must bring supply and demand into a better balance to reduce inflation.
Fed's Job to Restore Price Stability
"At the end of the day, our job is clear," said Williams. "Our job is to restore price stability, which is the foundation of a strong economy."
Fed Officials Signal Higher Interest Rates
Fed officials have been signaling that interest rates may have to move higher than previously, following the upside inflation and labor market surprises this month.
US Economy Continues to Exceed Supply
Williams said that strong demand in the US economy continues to exceed supply, pointing to persistent price pressures in the services sector, excluding food, energy, and shelter. He also said that the continued demand for goods and ongoing supply-chain issues in the global economy might keep prices from falling as quickly as expected.

St. Louis Fed President Supports Additional Rate Hikes
Speaking at a separate event, St. Louis Fed President James Bullard said that the US economy is proving more resilient than expected and deserves additional rate hikes, potentially up to 5.375%.
Policymakers Increase Rates to Stem Inflation
Policymakers increased rates by a quarter percentage point at their Jan. 31-Feb. 1 meeting to a range of 4.5% to 4.75%. This was a slowdown from a 50 basis-point hike in December, which followed four consecutive 75 basis-point increases last year. Officials have raised rates faster since the early 1980s to tackle stubbornly high inflation.
St. Louis and Cleveland Fed Presidents Voice Support for Peak Rate
Bullard and his colleague Loretta Mester of the Cleveland Fed have voiced their support for reaching the peak rate fast and have indicated that they may have supported a larger increase at the last meeting. Minutes from that gathering showed that "a few" participants would have voted for a bigger hike.