NY Fed’s Williams: Monetary Policy Targets Inflation, Not Price Level

Williams is restating the standard inflation-targeting framework, but the timing gives it weight: with price levels still elevated, calls to reverse past increases are circulating, and this draws a line against them. The distinction matters because a price-level target would imply different policy after a shock than an inflation target does, and the pushback is really about which framework the Fed will defend. For markets parsing Fed communication, the signal is continuity of doctrine rather than a policy shift. Whether that framework holds as price-level arguments gain traction is the open question.