Federal Reserve Bank of New York President John Williams said we are seeing broader-based increases in inflation on Thursday, according to Reuters. Even after taking into account base effects, said Williams, we are seeing a pick up in underlying inflation in the US. Long-run inflation expectations reversed earlier declines, he continued, and are now at levels seen in 2013 and 2014. 

On the labour market, Williams said that supply constraints are a major factor. 

On the Fed's average inflation targeting framework announced in 2020, Williams said it was well suited for the current environment, as it starts from a point of making sure inflation expectations are anchored at 2.0%. 

Market Reaction

FX markets have not see any reaction to these comments, with the DXY still trading a tad weaker on the day to the south of the 95.80 level.