Fed's Williams: We may need to maintain restrictive policy stance

New York Fed President John Williams said inflation is easing but policy still needs to be tight. New York Fed President John Williams said on Wednesday that inflation data is trending in the right direction but he expects monetary policy to remain restrictive. “My baseline scenario is that the current restrictive stance of monetary policy will continue to restore balance and bring inflation back to our 2% long-run goal,” Williams said in a speech in New York. “I expect some of us will need to maintain a restrictive stance to fully achieve our goals, and it would be appropriate to only scale back the degree of policy restraint once we are confident that inflation is moving toward 2%.” The risks to the Fed are “both sides,” he said, because the Fed could pull back too soon and risk higher inflation or hang on for too long and hurt the economy.