NY Fed's Williams says flexible inflation targeting not based on a formula

(Reuters) – The Federal Reserve will need to purposely overshoot on its 2% inflation target temporarily to make up for periods when inflation is lower than desired, and it will need to be flexible in its approach, New York Federal Reserve Bank President John Williams said on Tuesday.

“We need to make sure that we’re purposely overshooting that moderately for some time to get that balance,” Williams told reporters. “To me, success is not some arithmetic or some formula but it’s really this notion of inflation expectations, how people think about what’s inflation going to be in the future.”

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