John C Williams: A bedrock commitment to price stability Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the2022 US Hispanic Chamber of Commerce National Conference, Phoenix, Arizona, 3 October 2022. ***  As prepared for delivery Thank you for that kind introduction. I'm so pleased to join you today. As business leaders and business owners, you are integral to the U.S. economy. So, it's fitting for me to have this opportunity to talk to you about the state of our economy, as well as a topic that's on everyone's mind: inflation. From Main Street to Wall Street-and to Liberty Street, where the New York Fed is headquartered-inflation is the No. 1 concern. Clearly, inflation is far too high, and persistently high inflation undermines the ability of our economy to perform at its full potential. The Federal Reserve has two goals: maximum employment and price stability. History teaches us that price stability is essential to achieving maximum employment over the longer term. We at the Federal Reserve are therefore taking strong actions to restore price stability as a foundation for sustained economic prosperity. Today I will talk about why high inflation broke out last year, how it has evolved, and why I am confident that we are taking the necessary actions to bring inflation down.
But before I do, I will give the standard Fed disclaimer that the views I express today are mine alone, and do not necessarily reflect those of the Federal Open Market Committee (FOMC) or others in the Federal Reserve System. Inflation's Disparate Impact The FOMC's price stability objective is for inflation to average 2 percent over the longer run, as measured by the personal consumption expenditures price index. 1 In the three decades before the pandemic, this inflation rate averaged almost exactly 2 percent. But that changed dramatically last year, when inflation suddenly soared. It has reached fourdecade highs in recent months, and now stands at over 6 percent. High inflation spares no one. It makes it more expensive to feed families, heat homes, and pay rents. While everyone feels the pain, not everyone is affected equally. Those who can least afford the essentials-like food, gas, and housing-suffer the most. Inflation also has a disparate impact across ethnic groups. Economists at the New York Fed found that since 2021, Black and Hispanic households have faced higher inflation than the national average-and Hispanic families have been affected the most. 2 This is largely because on average, Hispanic households spend a larger share of their budgets on items most affected by the recent high inflation. 1/5  BIS - Central bankers' speeches  The Inflation Onion The sources of high inflation are many and complex, and they stretch across the globe. Nearly all economies are experiencing unusually high rates of inflation.