Fed's Williams says wants to avoid inflation becoming highly persistent

Federal Reserve Bank of New York President John Williams speaking in Tokyo:

• Important that inflation expectations are well anchored
• You want to avoid inflation becoming highly persistent because that could become permanent
• Way to avoid that is to respond relatively strongly when inflation begins to deviate from Target
• Misperceptions about ‘r star’ can lead to long-lasting deviations
• We have to be very aware that inflation expectations could shift in any ways that could be detrimental
• You want the whole curve of inflation expectations to be well behaved
• It’s not to say inflation expectations shouldn’t move, it means they should move in a way that emerges back to target within several years
• Levels of reserves in US are clearly abundant
• When you get big shocks its really nice to have a buffer via reserves
• For emerging market economies, exchange rate is very important aspect of inflation process, demand process

No indications of any near term rate cuts from the Federal Reserve in Williams' comments.