Fed’s Williams Says Pandemic Changed Inflation Perceptions

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.

John Williams

Photographer: Victor J. Blue/Bloomberg

“The thing you want to avoid is allowing inflation to become highly persistent, because highly persistent can kind of become ...